OF 


NQN  CIRCULATING 

CHECK  FOR  UNBOUND 
CIRCULATING  COPY 


UNIVERSITY  OF  ILLINOIS 

Agricultural  Experiment  Station 


BULLETIN  No.  269 


THE   MARKETING   OF   MILK 
IN   THE   CHICAGO   DAIRY   DISTRICT 

BY  H.  A.  Ross 


URBANA,  ILLINOIS,  JUNE,  1925 


FOREWORD 

If  marketing  conditions  for  agricultural 
products  are  to  be  improved,  plans  for  improve- 
ment must  be  built  on  a  solid  foundation  of  ascer- 
tained facts,  not  upon  opinion  and  guesswork. 
This  bulletin  describes  many  of  the  significant 
conditions  surrounding  the  Chicago  milk  market, 
the  present  agencies  for  distribution,  and  the 
trend  of  consumption,  with  special  reference  to 
the  problem  of  surplus  milk. 

It  is  the  purpose  of  the  Agricultural  Experi- 
ment Station  to  collect  and  publish  from  time  to 
time  similar  facts  concerning  other  agricultural 
products.  It  is  hoped  that  these  will  constitute  a 
sound  basis  for  the  improvement  of  marketing 
facilities. 

H.    W.    MUMFORD, 

Director 


CONTENTS 

PAGE 

INTRODUCTION 461 

THE  CHICAGO  MILK  MARKET  AND  MARKETING  AGENCIES 463 

Types   of   Middlemen 465 

The  Milk  Dealers'  Bottle  Exchange 467 

THE  CHICAGO  DAIRY  DISTRICT 469 

Regional  Production  of  Milk  and  Transportation  Costs 469 

Factors  Tending  to  Retard  the  Extension  of  the  Chicago  Dairy  District 473 

Intensity  of   Dairying  in   the   Inner   and   Outer  Parts  of   the   Chicago   Dairy 
District 478 

MILK  PRODUCTION  IN  THE  CHICAGO  DAIRY  DISTRICT 479 

Variation  from  Year  to  Year 480 

Seasonal  Variation  in  Production 483 

Seasonal  Production  and  Price 487 

CONSUMPTION  OF  DAIRY  PRODUCTS  IN  CHICAGO 489 

Consumption  in  Different  Sections  of  Chicago 490 

Long-Time  Trend  of  Consumption 494 

Seasonal   Variation   in   Consumption 495 

Variation  in  Consumption  by  Days  of  the  Week 498 

Consumption  of  Milk  as  Affected  by  Temperature 500 

Consumption  of  Milk  as  Affected  by  Price 503 

THE  PROBLEM  OF  SURPLUS  MILK 510 

Variation  in  Surplus  from  Year  to  Year 511 

Relation  Between  Size  of  Business  and  Amount  of  Surplus 513 

Seasonal  Variation  in  Amount  of  Surplus 515 

Daily  Variation  in  Amount  of  Surplus 516 

The  Utilization  of  Surplus  Milk 519 

Relation  Between  Prices  of  Sweet  Cream  and  Whole  Milk 523 

THE  COURSE  OF  MILK  PRICES 526 

Alternative   Markets  for  Milk 527 

Price  Determination 532 

CONCLUSIONS 533 

APPENDIX  (Tables) 535 


ACKNOWLEDGMENT 

To  the  many  agencies  that  furnished  the  mass  of  data 
embodied  herein — producers'  organizations,  milk  dealers, 
condenseries,  creameries,  cheese  factories,  railroads,  meat 
packers — a  word  of  acknowledgment  is  due.  Special  mention 
should  be  made  of  the  courtesy  of  several  milk  distributing 
companies  that  supplied  most  of  the  detailed  data.  These 
companies  not  only  opened  their  books  to  the  investigator 
but  were  also  generous  in  giving  the  time  both  of  their  execu- 
tive and  their  accounting  forces. 

To  the  Illinois  Agricultural  Association,  the  Experiment 
Station  is  indebted  for  a  part  of  the  funds  for  this  inquiry. 
The  Association,  realizing  the  need  for  a  study  of  milk  mar- 
keting conditions,  made  provision  for  a  half-time  research 
assistantship  in  dairy  marketing  at  the  University  of  Illinois 
for  the  year  1922-23,  and  the  funds  so  provided  were  used 
to  supplement  those  of  the  Experiment  Station  in  carrying 
forward  this  investigation. 


THE  MARKETING  OF  MILK  IN  THE 
CHICAGO  DAIRY  DISTRICT 

BY  H.  A.  Ross,  Formerly  Associate  in  Dairy  Economy 

INTRODUCTION 

Almost  all  city  milk  markets  at  some  time  or  other  have  exper- 
ienced serious  difficulties  over  the  question  of  price.  Producers  usually 
believe  that  the  prices  they  receive  for  milk  are  too  low,  particularly 
in  relation  to  the  prices  paid  by  consumers.  This  belief  has  resulted  in 
the  formation  of  many  cooperative  marketing  organizations,  some  of 
which  have  proved  successful,  while  others  have  failed. 

The  Chicago  market  has  not  escaped  the  difficulties  arising  from 
price  disagreements.  Dissatisfaction  among  producers  has  been  mani- 
fested by  four  milk  strikes  in  the  last  nine  years.  Altho  no  strikes 
occurred  during  1921  or  1922,  dissatisfaction  was  especially  strong  at 
that  time  because  the  margin  between  the  price  paid  by  the  consumer 
and  the  price  received  by  the  producer  was  unusually  wide  (Fig.  1). 
For  many  years  the  wholesale  price  to  the  producers  amounted  to 
about  40  percent  of  the  retail  price.  From  1917  to  1920,  wholesale 
prices  rose  more  rapidly  than  retail  prices  (Fig.  2)  so  that  the  producer 
received  about  half  the  consumer's  dollar.  For  the  next  two  years, 
however,  wholesale  prices  declined  much  more  than  retail  prices  and  the 
farmer's  share  fell  to  about  a  third.  Higher  prices  during  1923  and  1924 
have  brought  back  the  ratio  of  earlier  years. 

The  present  investigation  was  undertaken  with  the  twofold  aim  of 
analyzing  the  Chicago  milk  situation  and  of  determining  some  of  the 
fundamental  facts  underlying  milk  marketing.  It  was  thought  that  past 
failures  of  cooperative  marketing  organizations  were  due  in  many 
instances  to  lack  of  knowledge  of  the  economic  principles  involved. 
Much  thought  has  been  given  in  the  past  to  the  form  of  organization 
but,  unquestionably,  too  little  attention  has  been  paid  to  obtaining  the 
economic  facts  of  milk  marketing  upon  which  ^to  base  sound  marketing 
practice.  This  study,  therefore,  intentionally  passes  over  the  question  of 
organization  and  deals  only  with  the  specific  facts  of  marketing.  It  may 
be  stated  at  the  outset  that  no  all-sufficing  remedy  for  the  ills  of  the 
situation  is  offered.  Certain  principles,  however,  are  presented,  based 
on  a  careful  statistical  analysis  of  the  data,  which  may  assist  in  the  solu- 
tion of  the  problems. 

The  data,  obtained  for  the  most  part  during  the  year  October,  1922, 
to  September,  1923,  are  of  two  kinds:  (1)  survey  data  obtained  by  the 

461 


462 


BULLETIN  No.  269 


[June, 


issuance  of  questionnaires  to  all  of  the  milk  dealers  in  Chicago,  and 
(2)  detailed  data  taken  directly  from  the  books  of  a  few  dealers. 
Months  of  work  in  going  over  ledgers  and  other  records  yielded  a  large 
amount  of  material  for  study.  All  this  has  been  analyzed  and  the  results 
are  presented  in  the  various  tables.  Because  of  the  keen  competition 
between  milk  companies  in  Chicago,  the  dealers  required  that  many  of 


190X1904  J905  190  fi  /<M7  /9MJ90.9  1310  1911  1912  1913  19/4  1915  1916  1917  1916  1919  1320  1921  1922  1923 


FIG.  1. — COMPARISON  OF  RETAIL  PRICES  OF  MILK  IN  CHICAGO  AND  WHOLESALE  PRICES 
PAID  TO  PRODUCERS  AT  COUNTRY  PLANTS 

Prior  to  1916  the  retail  price  of  milk  remained  unchanged  for  long  periods,  while 
the  price  to  the  producers  varied  with  the  season  and  showed  a  slow  upward  trend. 
From  1917  to  1920  the  wholesale  price  rose  more  rapidly  than  the  retail  price.  When 
milk  prices  declined  in  1920,  the  wholesale  price  fell  more  rapidly  than  the  retail  price, 
resulting  in  an  unusually  wide  margin.  (See  Tables  A  and  B,  Appendix,  for  monthly 
prices.) 

these  figures  be  expressed  as  percentages,  or  in  some  form  which  would 
not  divulge  the  identity  of  the  companies  or  the  facts  relating  to  any 
individual  business.  Wherever  possible,  figures  from  different  dealers 
have  been  combined,  and  it  has  been  the  writer's  earnest  endeavor  to 
live  up  to  the  spirit  of  the  agreement  under  which  these  valuable  private 
records  were  made  available  to  the  public. 

It  has  seemed  advisable  to  include  some  descriptive  and  explana- 
tory material  about  the  Chicago  market  and  the  dairy  district  in  order 
to  give  background  to  the  study  for  those  readers  who  may  not  be 
familiar  with  the  region.  With  this  exception,  an  effort  has  been  made 
to  leave  out  all  discussion  not  bearing  directly  on  the  main  subject. 


MARKETING  MILK  IN  CHICAGO  DAIRY  DISTRICT 


463 


The  study  is  built  about  the  problem  of  surplus  milk.  With  this  in 
view,  production  and  consumption  are  first  studied  separately.  Consid- 
erable attention  is  given  to  the  demand  side  of  the  market,  not  because 
it  is  considered  the  most  important,  but  because  very  little  is  known 
concerning  it.  The  problem  of  surplus  milk  is  next  considered  and  this 
is  followed  by  a  brief  comparison  of  the  Chicago  milk  prices  and  prices 
of  milk  in  the  regions  producing  a  surplus.  Detailed  tables  not  essential 
to  the  text  are  given  in  the  Appendix. 


FIG.  2. — INDEX  NUMBERS  REPRESENTING  PRICES  RECEIVED  BY  PRODUCERS  FOR  ALL  MILK 

DELIVERED  AT  COUNTRY  PLANTS,  AND  DEALERS'  MARGIN  FOR  HANDLING 

THAT  PART  OF  THE  MILK  RETAILED  IN  QUART  BOTTLES 

From  1917  to  1920  the  producer  received  about  SO  percent  of  the  consumer's  dollar 
as  compared  with  about  40  percent  before  the  war.  During  1921  and  1922  his  share 
was  less  than  the  pre-war  average.  (See  Tables  C  and  D,  Appendix,  for  monthly 
index  numbers.) 

THE  CHICAGO  MILK  MARKET  AND  MARKETING  AGENCIES 

The  demand  for  any  commodity  in  a  given  market  is  determined 
by  two  factors:  the  number  of  people  using  the  commodity  and  the 
amount  used  by  each.  In  the  case  of  milk,  the  first  of  these  factors  is 
measured  approximately  by  the  population  of  the  city,  because  the  use 
of  milk  is  almost  universal.  The  second  factor,  the  amount  used  per 
person,  is  variable  but,  like  wheat,  the  variation  is  far  less  than  it  is  in 
the  consumption  of  the  less-essential  foodstuffs.  Hence,  the  probable 
increase  in  population  may  be  taken  to  express  roughly  the  probable 
increase  in  the  demand  for  milk. 

The  dairymen  in  the  Chicago  district  are  fortunate  as  regards  the 
prospect  for  increase  of  population,  for  the  city  gives  every  evidence  of 


464 


BULLETIN  No.  269 


{.June, 


continuing  its  rapid  growth.  Eighty  years  ago  it  was  a  village  with  less 
than  5,000  inhabitants.  Today  it  is  rapidly  approaching  the  3,000,000 
mark  (Table  1).  If  we  include  the  numerous  suburbs,  which  are  really 
a  part  of  the  Chicago  market,  it  seems  probable  that  the  1930  Census 
will  show  approximately  3,500,000  milk-users  in  this  great  center. 

In  spite  of  the  fact  that  the  growing  population  of  Chicago  requires 
each  year  an  increasing  amount  of  milk  to  supply  its  needs,  the  number 
of  milk  distributors  has  been  steadily  decreasing.  In  1915,  according 
to  the  Department  of  Health,  there  were  1,260  milk  depots  and  5,671 

TABLE  1. — CHICAGO  AND  SUBURBS  AS  A  GROWING  MARKET  FOR  DAIRY  PRODUCTS 
Total  population,  United  States  Bureau  of  the  Census 


Year 

Chicago 

Cook  county 

1840  

4  470 

10  201 

1850  

29  963 

43  385 

1860  

109  260 

144  954 

1870  

298  977 

349  966 

1880  

503  185 

607  524 

1890  

1  099  850 

1  191  922 

1900  

1  698  575 

1  838  735 

1910  

2  185  283 

2  405  233 

1920  

2  701  705 

3  053  017 

stores  handling  milk.1  By  1923  the  number  of  depots  had  decreased 
to  575,  while  the  number  of  stores  handling  milk  had  increased 
to  8,473 .2  The  decrease  in  the  number  of  distributors  may  be  attributed 
largely  to  an  order  issued  by  the  Commissioner  of  Health  on  July  22, 
1916,  requiring  that,  with  the  exception  of  certified  milk,  all  milk  sold 
or  used  in  Chicago  be  pasteurized.  Many  small  dealers  without  pasteur- 
izing equipment  were  forced  out  of  business.  Others  arranged  to  buy 
milk,  already  pasteurized  and  bottled,  from  the  larger  dealers.  In  a  few 
instances  companies  were  formed  for  the  express  purpose  of  pasteur- 
izing and  bottling  milk  for  a  group  of  independent  distributors,  few  of 
whom  operate  more  than  one  or  two  wagons.  In  1923  there  were  281 
pasteurizing  plants  in  Chicago  as  compared  with  251  in  1915,  298 
in  1916,  301  in  1917,  and  270  in  1918. 

Competition  also  has  accounted  for  a  part  of  the  decrease  in  the 
number  of  dealers.  The  advantage  which  the  larger  distributors  have  in 
economy  of  operation  and  in  facilities  for  handling  surplus  milk  would 
tend  to  drive  the  one-  or  two-wagon  dealers  out  of  business  were  it  not 
for  the  fact  that  in  the  small  companies  most  of  the  labor  required  to 
handle  and  deliver  the  milk  is  furnished  by  the  dealer  and  his  family. 

1Report  of  the  Bureau  of  Food  Inspection.  Department  of  Health,  City  of  Chicago, 
1911-1918.  Reprint  Series  No.  11,  p.  893,  1919. 

letter  from  Dr.  J.  P.  Kilcourse,  Chief,  Bureau  of  Food  Inspection,  City  of 
Chicago,  August  29,  1923. 


7925] 


MARKETING  MILK  IN  CHICAGO  DAIRY  DISTRICT 


465 


If  the  same  rate  had  been  paid  for  this  labor  as  was  paid  by  dealers 
dependent  upon  hired  workers,  the  decrease  in  the  number  of  dis- 
tributors probably  would  have  been  more  rapid  than  it  has  been. 

An  idea  of  the  approximate  size  of  the  companies  distributing  milk 
in  Chicago  may  be  obtained  from  Table  2.    The  companies  are  here 

TABLE  2. — VARIATION  IN  SIZE  OF  MILK  DISTRIBUTING  COMPANIES  IN  CHICAGO 
Based  on  the  number  of  wagons  operated  in  1923 


Group 

Number  of 
wagons  per 
dealer 

Number  of 
dealers* 

Total  number 
of  wagons 
operated1* 

]  

1 

174 

174 

2  

2 

57 

114 

3  

3 

29 

87 

4  

4 

10 

40 

5  

5 

19 

95 

6  

6  to    10 

19 

147 

7  

11  to    15 

10 

131 

8  

16  to    20 

7 

122 

9  

21  to    25 

g 

191 

10  

26  to    50 

8 

306 

11  

51  to  100 

7 

416 

12  

101  to  200 

2 

321 

13  

Over  200 

2 

2022 

To^l  

352 

4  166 

"Several  companies  which  were  organized  for  the  purpose  of  pasteurizing  and  bottling 
milk  for  a  group  of  independent  distributors  have  been  considered  here  as  dealers.  The 
number  of  wagons  operated  is  taken  as  the  total  operated  by  the  sub-dealers  making  up 
each  of  these  units. 

bWhen  a  company  operates  wagons  both  in  Chicago  and  the  suburbs,  the  total  num- 
ber is  included. 

grouped  according  to  the  number  of  wagons  each  operates.  Altho  this 
is  not  an  exact  measure  of  the  volume  of  business,  it  shows  the  great 
diversity  in  the  size  of  the  companies.  These  range  from  the  dealer  who 
receives  a  few  cans  of  milk  from  near-by  farms,  which  he  bottles  and 
delivers  in  the  immediate  neighborhood,  to  the  company  which  buys 
milk  at  thirty-one  country  plants  and  uses  over  1,300  wagons  in  dis- 
tributing it  thruout  the  city  and  in  some  of  the  suburbs.  It  may  be 
noted  that  there  is  a  decided  discrepancy  between  this  table  and  the 
report  of  the  Department  of  Health  as  to  the  number  of  companies 
operating.  The  difference  is  due,  in  part,  to  classing  as  one  company 
each  group  of  independent  dealers  having  a  common  bottling  plant,  as 
mentioned  above. 

TYPES  OF  MIDDLEMEN 

Altho  the  many  agencies  handling  milk  in  Chicago  may  be  sepa- 
rated roughly  into  groups  according  to  the  general  type  of  business  they 
represent,  no  sharp  lines  of  division  can  be  drawn  because  of  the  over- 
lapping of  activities.  For  instance,  almost  all  the  large  and  many  of  the 


466  BULLETIN  No.  269  [June, 

small  retail  dealers  have  some  wholesale  trade.  For  the  purpose  of  dis- 
cussion, however,  they  will  be  classed  here  as:  (1)  retail  distributors; 
(2)  wholesale  distributors;  (3)  stores;  (4)  jobbers;  (5)  brokers. 

1.  Retail  Distributors. — The  greater  part  of  the  milk  sold  in  Chi- 
cago is  handled  by  dealers  whose  chief  aim  is  to  supply  the  retail  trade, 
but  who  also  sell  large  quantities  of  milk  at  wholesale,  either  as  bulk 
milk  to  hotels  and  restaurants  or  as  bottled  milk  to  stores,  schools, 
industrial  plants   and  the   like.    If  the  volume   of  wholesale   trade  is 
sufficiently  large,  special  wagons  or  trucks  are  used  to  make  deliveries. 
Otherwise,  the  wholesale  business  is  handled  on  the  retail  wagons.   Fre- 
quently the  wholesale  trade  in  a  district  is  so  small  that  it  is  more 
economical  to  pay  the  regular  retail  commissions  to  the  drivers  than  it  is 
to  make  a  special  delivery  with  a  wholesale  truck.    As  a  result,  the 
records  of  some  companies  are  in  a  form  which  does  not  permit  the 
separation  of  the  retail  and  wholesale  business: 

2.  Wholesale  Distributors. — A  few  dealers   make  no  attempt  to 
enter  the  retail  trade.  They  sell  both  bottled  and  bulk  milk  and  cream 
to  hotels,  restaurants,  and  institutions  using  large  quantities.    By  far 
the  largest  part  of  the  wholesale  trade  in  bottled  milk,  however,  is  with 
the  stores.    Since  1920,  there  has  also  developed  a  large  demand  for 
milk  in  half-pint  bottles  for  school   lunches.    Altho  this   demand   is 
seasonal,  corresponding  with  the  school  term,  the  amount  consumed  in 
this  way  is  a  very  appreciable  part  of  the  total  milk  consumption.   The 
sale  of  milk  to  a  school  not  only  increases  consumption  directly,  but  it 
also  serves  as  an  excellent  method  of  advertising  the  milk  of  the  par- 
ticular dealer  supplying  the  school.   Hence,  this  trade  is  perhaps  more 
sought  after  than  the  profits  warrant.    Many  offices  and  factories  also 
buy  considerable  quantities  of  milk  in  half-pint  bottles  for  their  em- 
ployees' lunches,  and  this  trade,  unlike  that  of  the  schools,  continues 
thruout  the  summer. 

3.  Grocery  and  Delicatessen  Stores. — Unlike  some  of  the  eastern 
cities,    Chicago   does    not    have    stores    dealing    exclusively    in    dairy 
products,  but  milk  and  cream  are  commonly  sold  from  grocery  and 
delicatessen  stores.    The  price  of  milk  sold  in  this  manner  is  usually 
the  same  as  the  regular  retail  price  charged  by  the  distributor.  Even  tho 
at  most  stores  no  saving  is  made,  the  amount  handled  in  this  way  is 
very  large,  particularly  during  the  summer.   The  corner  grocery  serves 
as  a  convenient  milk  depot  to  which  the  housewife  can  send  for  an 
extra  bottle  of  milk  to  supplement  the  regular  daily  delivery.    In  addi- 
tion, many  families  lacking  ice  in  the  summer  time,  depend  on  stores  for 
the  purchase  of  milk  in  small  amounts  just  before  it  is  to  be  consumed. 
The  stores  also  get  a  large  part  of  the  trade  of  construction  workers 
and  similar  groups  of  laborers,  among  whom  there  has  been  a  great 
increase  in  the  use  of  milk  since  the  passing  of  the  beer  pail,  altho 
large  quantities  are  also  purchased  directly  from  retail  wagons  which 
make  deliveries  during  the  lunch  hour. 


7925]  MARKETING  MILK  IN  CHICAGO  DAIRY  DISTRICT  467 

Jobbing  Companies. — These  represent  another  type  of  middleman 
in  Chicago.  These  companies  sell  milk,  cream,  and  ice-cream  mix  to 
dealers  or  plants  in  Chicago  and  in  various  other  cities.  In  fact,  this 
business  is  not  limited  to  near-by  markets.  During  the  summer,  car- 
load shipments  of  cream  and  ice-cream  mix  are  sent  regularly  to  distant 
points,  such  as  Philadelphia,  Memphis,  and  New  Orleans.  This  milk 
and  cream  is  ordinarily  drawn  from  the  distant  parts  of  the  Chicago 
dairy  district,  particularly  from  the  regions  producing  a  surplus.  For 
instance,  one  of  these  companies  is  a  subsidiary  of  a  large  condensed 
milk  company  and  obtains  its  supply  of  milk  from  the  condensing  plants 
of  the  main  company.  These  jobbers  serve  a  useful  purpose  in  provid- 
ing a  readily  available  supply  for  the  distributors  during  the  shortage 
season,  when  the  regular  supply  from  the  country  fails  to  meet  the 
demand.  In  addition,  many  of  the  smaller  dealers  obtain  cream  from 
this  source  thruout  the  year,  with  the  exception  of  a  month  or  two  dur- 
ing the  spring  when  production  is  heaviest. 

5.  Milk  Brokers. — Milk  brokers,  as  indicated  by  the  name,  do  not 
actually  handle  milk,  but  serve  to  find  a  market  for  individual  farmers 
who  wish  to  ship  their  milk  directly  to  a  dealer  in  the  city.  In  the  past, 
certain  brokers  also  guaranteed  collections  for  the  farmers,  thus  insur- 
ing them  against  loss  from  irresponsible  milk  dealers.  The  business  of 
these  brokers  is  largely  with  the  small  dealers  who  have  no  country 
plants.  In  recent  years,  the  producers'  organizations  have  taken  over 
most  of  the  brokerage  business  formerly  handled  by  privately  owned 
companies.  At  no  time  has  this  method  of  selling  milk  in  Chicago 
reached  the  proportions  found  in  some  city  markets. 

THE  MILK  DEALERS'  BOTTLE  EXCHANGE 

The  difficulty  of  complying  with  a  Chicago  ordinance  which  re- 
quires that  a  milk  dealer  use  only  bottles  marked  with  the  company's 
name  is  apparent  when  it  is  remembered  that  over  four  thousand 
wagons  and  twice  as  many  stores  are  distributing  milk  in  the  city.  The 
Chicago  dealers  have  gone  far  towards  solving  the  problem,  however, 
by  the  formation  of  the  Milk  Dealers'  Bottle  Exchange,  which  began  to 
function  in  a  small  way  March  1,  1919,  and  came  into  full  operation 
February  1,  1920. 

The  Exchange  is  a  stock  corporation  owned  by  the  milk  dealers  in 
Chicago  in  the  proportion  of  one  share  of  stock  for  each  wagon  operated. 
Approximately  90  percent  of  the  dealers,  who  operate  98  percent  of  the 
wagons  in  Chicago,  are  stockholders  in  the  Exchange  and  a  number  of 
dealers  that  are  not  members  are  served  also.  Most  of  the  dealers  have 
pledged  themselves  to  use  only  their  own  bottles,  altho  the  drivers  are 
required  to  collect  all  empty  bottles  regardless  of  their  ownership.  The 
dealer  sorts  out  the  bottles  belonging  to  other  companies,  and  when 
these  have  accumulated  in  sufficient  number  they  are  picked  up  by  a 


468 


BULLETIN  No.  269 


[June, 


truck  from  the  Exchange.  At  the  Bottle  Exchange  they  are  sorted  and 
returned  to  their  proper  owners.  Approximately  2,000,000  bottles  are 
handled  each  month.1  A  cent  and  a  half  is  charged  for  each  bottle 
returned  and  the  dealer  receives  three-fourths  of  a  cent  for  each  bottle 
sent  to  the  Exchange.  The  difference  (three-fourths  of  a  cent)  is 
sufficient  to  maintain  the  organization,  and  the  expense  to  the  dealers  is 
very  much  less  than  the  loss  in  bottles  which  resulted  from  the  former 
disregard  of  ownership. 

TABLE  3. — EFFECT  OF  BOTTLE  EXCHANGE  IN  DISCOURAGING  USE  OF  BOTTLES  OWNED 

BY  OTHER  DEALERS 


Group 

Number  of 
wagons  per 
dealer 

Number  of 
dealers 

Total 
number 
of  wagons 

Percentage  of  bottles  owned 
by  dealers  using  them 

First 
inspection 
recorded" 

Last  in- 
spection 
recorded15 

Increase 

I.. 

1  to    5 
6  to  15 
16  to  35 
Over  35 

285 
31 
16 

17 

500 
282 
360 
2  977 

49.6 
71.6 
86.2 
99.2 

73.1 
88.4 
92.8 
100.0 

23.5 
16.8 
6.6 
.8 

2  

3  

4  

All0  

349 

4  119 

*    90.2 

95.3 

5.1 

aDates  of  first  inspection  range  from  May,  1922,  to  December,  1922. 

bDates  of  last  inspection  range  from  March,  1923,  to  May,  1923. 

"Average  percentages  are  weighted  according  to  the  number  of  wagons  operated. 
The  number  of  dealers  and  wagons  do  not  quite  correspond  to  the  number  shown  in 
Table  2  because  of  incomplete  records  from  which  the  above  data  were  compiled. 

Writs  of  replevin  are  used  to  recover  bottles  from  dealers  who 
refuse  to  abide  by  the  agreement  and  from  junk  dealers  who  attempt  to 
ship  bottles  from  the  city.  Three  inspectors  are  employed  who  visit  the 
bottling  plants  and  make  a  count  of  the  bottles  of  other  dealers  which 
are  being  used.  If  these  amount  to  a  considerable  number,  the  offending 
dealer  is  warned,  and  if  this  is  not  sufficient,  a  writ  of  replevin  is  served 
by  the  sheriff's  office  and  the  bottles  are  taken  by  the  Exchange  without 
allowing  the  dealer  the  usual  three-fourths  of  a  cent  a  bottle. 

Before  the  formation  of  the  Bottle  Exchange,  little  attention  was 
paid  to  the  ownership  of  bottles,  so  that  in  a  load  of  milk  the  majority 
of  the  bottles  might  bear  names  other  than  the  name  of  the  distributor. 
During  that  period  many  of  the  small  dealers  bought  few  or  no  bottles, 
but  depended  on  those  belonging  to  other  dealers  which  their  drivers 
collected.  Certain  junk  dealers,  also,  made  a  practice  of  collecting  milk 
bottles,  which  they  sold  to  other  dealers  in  the  city  or  in  neighboring 
cities.  This  practice  became  so  flagrant  that  it  was  not  uncommon  to 
have  a  junk  dealer  approach  a  distributor  and  offer  to  sell  back  to  him 
some  of  his  own  bottles. 

Since  the  formation  of  the  Milk  Dealers'  Bottle  Exchange,  the 


Table  E,  Appendix. 


1925]  MARKETING  MILK  IN  CHICAGO  DAIRY  DISTRICT  469 

bottle  situation  in  Chicago  has  improved  greatly.  Records  are  not 
available  for  the  first  year  of  operation  during  which  the  greatest  im- 
provement was  observed,  but  Table  3  shows  that  even  during  the  last 
year  (1922-1923)  the  proportion  of  the  other  dealers'  bottles  in  use 
has  decreased  appreciably.  It  will  be  noted  that  the  smallest  dealers  are 
in  general  the  worst  offenders,  tho  many  one-  and  two-wagon  dis- 
tributors have  as  good  records  as  have  the  large  companies  and  are 
using  no  bottles  but  their  own. 

A  milk-can  exchange  for  wholesale  dealers  is  also  in  operation  in 
Chicago,  but  it  is  not  functioning  so  successfully  as  the  Bottle  Exchange. 
This  is  due,  in  part,  to  the  greater  value  of  the  cans,  the  ease  of  oblitera- 
ting the  owner's  name,  and  the  wide  territory  covered  by  can  shipments. 

THE  CHICAGO  DAIRY  DISTRICT 

In  the  preceding  pages  an  attempt  has  been  made  to  picture 
roughly  the  Chicago  milk  market  and  the  agencies  which  span  the  gap 
between  the  producers  and  the  consumers  of  milk.  In  the  following 
pages  an  attempt  is  made  to  present  a  similar  picture  of  the  Chicago 
dairy  district  and  the  milk  producers. 

With  the  growth  of  the  Chicago  milk  market  there  has  naturally 
been  a  corresponding  expansion  of  the  dairy  district  supplying  the 
market.  This  expansion  has  been  in  the  nature  of  rapid  and  irregular 
developments  along  certain  railroads  or  in  particularly  favorable  areas, 
rather  than  a  uniform  extension  of  the  outer  limits  of  the  milk  zone. 
Moreover,  this  uneven  boundary  of  the  milk  zone  advances  or  recedes 
with  seasonal  variation  in  production.  Many  plants  in  the  more  distant 
parts  of  the  district  hold  shipping  permits  from  the  Department  of 
Health  and  ship  fluid  milk  into  Chicago  during  the  season  of  shortage, 
but  condense  or  otherwise  utilize  the  milk  during  the  rest  of  the  year. 

The  direction  in  which  the  Chicago  milk  district  is  growing  is  quite 
apparent.  To  the  south,  corn-growing  appears  to  be  the  most  profitable 
type  of  agriculture  and  dairying  has  made  little  headway  in  that  direc- 
tion, but  to  the  west,  and  more  particularly  to  the  north,  dairying  is 
well  established.  The  only  question  here  is  one  of  a  market.  Will  the 
milk  now  being  produced  in  these  regions  be  condensed,  made  into 
butter  or  cheese,  or  be  shipped  in  natural  form  to  Chicago?  The 
answer  to  this  question  is  of  the  greatest  importance  to  the  dairymen 
now  supplying  the  Chicago  market. 

REGIONAL  PRODUCTION  OF  MILK  AND  TRANSPORTATION  COSTS 

McHenry,  Lake,  Kane,  and  DuPage  counties  in  Illinois  are  usually 
thought  to  represent  exceptionally  heavy  milk-producing  areas  because 
they  constitute  the  inner  or  most  intensive  part  of  the  Chicago  dairy 
district.  More  milk,  however,  is  produced  per  square  mile  in  Calumet 
and  Sheboygan  counties,  Wisconsin,  than  is  produced  in  McHenry 


470 


BULLETIN  No.  269 


[June, 


FIG.  3. — PRODUCTION  OF  MILK  IN  THE  CHICAGO  DAIRY  DISTRICT 

Each  figure  represents  the  number  of  thousands  of  gallons  produced  per 
square  mile  in  the  county,  according  to  the  1920  Census.  The  cost,  per  100 
pounds,  of  shipping  milk  to  Chicago  in  10-gallon  cans  is  indicated  by  the  dotted 
lines  forming  the  outer  limits  of  the  rate  zones.  Note  the  heavy  production  of 
milk  in  the  zone  bounded  by  the  40-  and  45-cent  rate  lines.  Most  of  this  milk 
is  now  condensed  or  made  into  butter  or  cheese,  but  it  can  be  shipped  to  the 
Chicago  market  at  a  cost  only  slightly  greater  than  the  cost  of  shipping  milk 
from  the  present  dairy  district.  Milk  can  be  shipped  in  tank  cars  from  this 
region  at  less  cost  than  milk  in  cans  from  the  near-by  district. 


1925]  MARKETING  MILK  IN  CHICAGO  DAIRY  DISTRICT  471 

county,  while  a  dozen  counties  in  Wisconsin  show  a  heavier  production 
than  Lake,  Kane,  or  DuPage  counties  (Fig.  3). 

The  great  volume  of  milk  produced  in  the  outer  zones  of  the  Chi- 
cago area  has  already  been  tapped  for  the  Chicago  market,  and  larger 
and  larger  amounts  will  be  drawn  from  it  in  the  future  as  the  city  mar- 
ket grows.  If  the  extension  of  the  Chicago  dairy  district  proceeds  at 
a  rate  just  sufficient  to  meet  the  needs  of  an  increasing  population,  the 
development  will  be  sound.  If,  however,  high  fluid-milk  prices  or  any 
other  factors  cause  the  outer  zone  to  change  too  rapidly  from  a  dairy 
manufacturing  region  to  a  milk  shipping  region,  the  dairymen  supply- 
ing Chicago  at  the  present  time  will  suffer,  because  the  city  market 
cannot  possibly  absorb  the  milk  they  are  producing  and  that  now  being 
produced  in  the  more  remote  regions.1 

The  cost  of  shipping  milk  to  Chicago  from  different  parts  of  the 
accessible  milk-producing  area  is  indicated  by  the  dotted  lines  on  the 
accompanying  map  (Fig.  3).  The  line  shown  is  for  100  pounds  of  milk 
in  10-gallon  cans.  These  lines  were  located  by  connecting  the  different 
shipping  stations  having  the  same  rates  for  milk.  Some  points  located 
on  branch  lines  within  the  various  zones  have  higher  rates  than  the 
zone  lines  indicate,  but,  in  general,  the  cost  of  shipping  milk  to  Chicago 
is  correctly  portrayed. 

At  the  present  time,  by  far  the  largest  part  of  the  milk  entering 
Chicago  comes  from  within  the  zone  bounded  by  the  transportation 
rate  of  40  cents  per  hundred  pounds.  Practically  double  this  amount 
of  milk  is  produced  in  the  territory  bounded  by  the  45-cent  rate  line. 
In  other  words,  the  payment  of  only  5  cents  a  hundred  pounds  addi- 
tional opens  up  a  territory  producing  a  larger  amount  of  milk  than  is 
produced  within  the  40-cent  zone.  Not  all  the  milk  produced  between 
the  40-  and  45-cent  rate  lines  is  available  for  the  Chicago  market,  for 
the  district  supplies  Milwaukee  and  numerous  smaller  cities.  Some  of  it, 
however,  is  already  going  to  Chicago.  Tho  much  of  it  is  of  sufficiently 
high  quality  to  be  diverted  to  the  fluid-milk  market,  the  bulk  of  it  is 
now  condensed  or  made  into  cheese  and  butter,  approximately  thirty- 
five  condensing  plants  being  located  within  this  zone  (Fig.  4).  The 
Swiss  cheese  industry,  centering  in  Green  and  LaFayette  counties, 
Wisconsin,  has  even  higher  requirements  relative  to  the  acidity  of  milk 
when  delivered  to  the  country  plant  than  does  the  fluid  market,  and 
this  milk  can  easily  be  made  to  meet  the  requirements  of  the  Chicago 
Department  of  Health. 

Another  factor  that  may  influence  the  development  of  the  Chicago 
dairy  district  is  the  tank  car.  At  least  twenty-five  of  these  cars  have 
been  purchased  by  four  or  five  dealers  and  in  all  probability  more  will 
be  put  into  use.  The  capacity  of  the  tank  car  is  approximately  51,000 


JSince  writing  the  above,  the  prediction  has  been  fulfilled.  High  prices  in  the 
summer  of  1924  attracted  Wisconsin  milk  and  cut  many  producers  in  the  inner  district 
out  of  a  market. 


472 


BULLETIN  No.  269 


[June, 


pounds,  or  more  than  twice  the  capacity  of  the  usual  car  loaded  with 
10-gallon  cans.  Because  of  this  fact,  relatively  low  transportation  rates 


o  Bottling  plants 

x  bulk  receiving 

stations 

D  Condensing  plants 


FIG.  4. — LOCATION  OF  COUNTRY  PLANTS  IN  THE  CHICAGO  DAIRY  DISTRICT 

Most  of  the  bottling  plants  are  located  in  the  inner  district  because  of  the 
higher  cost  of  shipping  bottled  milk.  Condensing  plants  tend  to  cluster  about  the 
margin  of  the  dairy  district,  altho  a  few  are  to  be  found  close  to  Chicago. 


have  been  granted  by  the  railroads.  For  instance,  the  quoted  rates  for 
milk  transported  from  Slinger,  Wisconsin,  to  Chicago  (a  distance  of  125 
miles)  reduced  to  a  hundredweight  basis  are  as  follows: 


1925}  MARKETING  MILK  IN  CHICAGO  DAIRY  DISTRICT  473 

Milk  in  tank  cars 27  cents 

Milk  in  10-gallon  cans 45  cents 

Milk  in  8-gallon  cans 49  cents 

Milk  in  bottles 72  cents 

With  the  low  rate  for  tank  cars,  milk  can  be  brought  long  distances 
at  less  expense  than  it  can  be  shipped  short  distances  in  cans.  Not  all 
dealers,  however,  can  take  advantage  of  this  saving  in  transportation. 
In  the  first  place,  only  comparatively  few  city  bottling  plants  are  located 
on  railroads,  and  the  necessity  of  transferring  the  milk  in  tank  trucks 
from  the  car  to  the  plant  offsets  a  part  of  the  advantage  in  their  use.  In 
the  second  place,  the  quoted  rate  is  based  on  a  minimum  load  of  40,000 
pounds,  and  relatively  few  country  stations  supply  this  amount  thruout 
the  year.  It  is  of  course  possible  to  load  a  tank  car  at  more  than  one 
station,  and  both  this  and  the  first  objection  could  be  met  by  the  use  of 
the  compartment  tank  car. 

In  the  third  place,  the  investment  involved  seems  too  large  to  many 
of  the  smaller  dealers.  This  factor  is  of  no  particular  consequence,  how- 
ever, when  compared  with  the  saving  in  the  cost  of  transportation  if  a 
sufficient  volume  of  milk  is  available.  The  initial  cost  of  the  cars  is 
high,1  but  the  upkeep  is  far  less  than  that  of  cans  sufficient  to  handle 
an  equal  amount  of  milk. 

The  present  tendency  in  the  use  of  tank  cars  is  to  draw  milk  from 
well-established  country  plants  in  the  regular  Chicago  district,  and  so 
long  as  this  is  continued  tank  cars  will  be  an  advantage  to  the  producers 
of  the  inner  district  as  well  as  to  the  dealers.  They  make  it  possible, 
however,  for  dealers  to  go  far  up  into  the  surplus  regions  and  obtain 
milk  not  now  reaching  the  Chicago  market,  for  the  cost  of  transporting 
milk  from  these  regions  in  tank  cars  is  less  than  the  can  rates  from 
the  near-by  shipping  stations. 


The  economic  position  of  the  dairymen  located  in  the  inner  dairy 
district  and  producing  milk  for  the  Chicago  market  might  be  considered 
very  insecure,  because  of  the  great  surplus  milk-producing  region  which 
adjoins  on  the  north,  were  it  not  for  certain  factors  which  tend  to  main- 
tain the  present  district.  These  factors  are:  the  large  investment  in 
country  plants,  the  limitations  of  direct  shipments  of  milk,  and  the 
increased  use  of  motor  trucks  in  the  district. 

Large  Investment  in  Country  Plants. — A  very  large  amount  of 
milk  used  in  Chicago  is  bottled  in  country  plants.  These  bottling  plants, 
approximately  forty  in  number,  are  scattered  thruout  the  principal 
parts  of  the  dairy  district,  as  shown  in  Fig.  4.  Altho  owned  by  but  six 
companies,  these  six  companies  operate  over  half  the  wagons  in  Chicago. 


1The  quoted  price  in  March,  1924,  for  a  complete  car  was  $13,500. 


474  BULLETIN  No.  269  [/w«<r, 

The  milk  received  at  these  plants  is  pasteurized,  bottled,  and  shipped 
to  the  city  in  refrigerator  cars.  As  each  of  these  country  units  is  a 
complete  milk  plant  and  usually  includes  equipment  for  the  utilization 
of  surplus  milk,  a  very  large  investment  is  represented  by  the  combined 
group.  For  this  reason,  any  shift  in  the  dairy  district  which  would 
mean  the  abandoning  of  these  plants  would,  if  possible,  be  avoided.  At 
the  same  time,  should  a  producing  area  be  opened  which  would  permit 
competing  dealers  to  purchase  their  supplies  at  decidedly  lower  prices 
than  those  prevailing  in  the  locality  of  the  country  plants,  the  companies 
owning  the  country  plants  would  be  forced  to  meet  the  competition. 

In  addition  to  the  large  amount  of  capital  represented  by  these 
bottling  plants  there  is  also  a  very  heavy  investment  in  country  plants 
where  milk  is  received,  cooled,  and  shipped  to  the  city  bottling  plants. 
Altho  the  usual  method  is  to  ship  the  milk  in  10-gallon  cans  in  refrig- 
erator cars,  some  variations  are  to  be  observed,  such  as  the  use  of 
8-gallon  cans  and  the  tank  cars  previously  mentioned.  In  a  few  instances 
tank  trucks  are  used  to  transport  the  milk  from  the  nearest  receiving 
stations.  As  may  be  seen  by  Fig.  4,  many  of  these  plants  are  located 
much  farther  from  the  city  than  the  bottling  plants.  This  is  to  be 
expected,  because  the  transportation  rates  for  the  bottled  milk  are  from 
50  to  70  percent  greater  than  for  milk  in  10-gallon  cans.  This  relatively 
high  transportation  rate  and  the  increasing  use  of  motor  trucks  and 
tank  cars  may  foreshadow  the  conversion  of  many  of  the  country 
bottling  plants  into  bulk  receiving  stations.  In  the  past,  the  higher  cost 
of  shipping  bottled  milk  was  offset  to  a  certain  extent  by  lower  labor 
costs  in  the  country  plants,  but  this  advantage  was  lost  when  the 
country  workers  in  the  inner  district  were  unionized. 

Probably  the  most  distant  country  plant  of  a  Chicago  dealer  is 
located  at  Oconto,  Wisconsin,  approximately  230  miles  from  the  city. 
Other  isolated  spots  in  the  great  surplus  producing  region  from  which 
milk  is  regularly  shipped  are:  Appleton,  184  miles;  Ripon,  168  miles; 
Fond  du  Lac,  148  miles;  and  Plymouth,  151  miles.  It  is  from  similar 
points  outside  the  main  district  that  the  jobbers  usually  draw  their 
supply  of  milk  and  cream. 

It  is  a  peculiar  fact  that  until  very  recently  no  difference  was  made 
in  the  price  paid  for  milk  at  the  various  country  plants  in  the  main 
Chicago  district  regardless  of  the  freight  charges.  Since  the  dealers  buy 
on  average  costs  of  transportation,  the  near-by  dairyman  with  higher 
production  costs  has  been  penalized  by  having  to  pay  a  portion  of  the 
transportation  costs  of  the  milk  produced  in  the  more  distant  parts  of 
the  district.  It  is  surprising  that  a  practice  so  illogical  and  uneconomic 
as  this  one  has  persisted  for  so  many  years,  particularly  with  the  can- 
shippers  in  the  same  territory  operating  under  what  amounts  to  a 
zoning  system.  At  the  present  time  a  premium  of  8  cents  a  hundred 
pounds  of  milk  is  paid  at  a  few  of  the  nearest  country  plants  and  it  is  to 
be  hoped  that  the  practice  will  be  extended  until  all  milk  purchased 


1925}  MARKETING  MILK  IN  CHICAGO  DAIRY  DISTRICT  475 

at  country  plants  will  be  subject  to  a  differential  at  least  as  great  as  the 
difference  in  freight  rates.  If  such  a  system  of  buying  is  put  into  effect 
it  will  tend  to  retard  the  extension  of  the  dairy  district  by  giving  to  the 
near-by  dairymen  the  differential  in  price  which  is  economically  justified 
by  their  nearness  to  market. 

Limitations  of  Direct  Shipments. — Of  the  575  dealers  in  Chicago, 
only  about  forty  have  country  plants.  The  rest  obtain  their  milk  in  one 
or  more  of  the  following  ways:  by  purchases  from  other  dealers,  by 
truck  from  the  country,  or  by  direct  shipment  in  cans  from  individual 
dairymen.  The  last  method  is  also  employed  to  some  extent  by  certain 
of  the  dealers  having  country  plants.  This  milk  is  shipped  in  8-gallon 
cans  and  is  ordinarily  handled  without  ice  in  regular  baggage  cars. 

The  can-shippers  receive,  in  addition  to  the  regular  milk  price,  an 
allowance  of  15  cents  a  can  if  they  furnish  the  cans.  They  pay  the  cost 
of  transportation  and  are  allowed  about  23.5  cents  a  can  by  the  deal- 
ers to  cover  this  cost.  The  amount  allowed  for  transportation  is  equal 
to  the  freight  rate  from  points  approximately  fifty  miles  from  Chicago. 
If  the  shipper  lives  nearer  the  city,  he  profits  by  the  arrangement  to 
the  extent  of  the  difference  between  the  rate  allowed  and  what  he 
actually  has  to  pay.  This  fact,  together  with  the  lack  'of  refrigeration, 
has  tended  to  limit  the  can  shipments  to  a  zone  with  a  maximum  radius 
of  about  75  miles.  Were  it  not  for  these  two  factors,  many  dairymen 
in  the  outer  zone  who  are  now  selling  to  condenseries  or  cheese  factories 
would  ship  directly  to  small  dealers  in  the  city. 

The  approximate  number  of  can-shippers  sending  milk  to  Chicago 
over  the  principal  railroads  in  the  spring  of  1923  was  obtained  by  the 
Milk  Producers'  Association.  The  number  reported  by  the  various 
roads  was  as  follows:1 

Chicago,  Milwaukee  and  St.  Paul 500 

Illinois  Central 292 

Pennsylvania 250 

Chicago    Great    Western 150 

Chicago,  Burlington  and  Quincy 116 

Chicago,  North  Shore  and  Milwaukee 62 

Aurora,  Elgin  and  Chicago 60 

Grand    Trunk 55 

The  Chicago  and  Northwestern  and  the  New  York  Central  were 
unable  to  give  the  desired  information.  Mr.  E.  C.  Rockwell,  Secretary 
of  the  Milk  Producers'  Association,  estimated,  however,  that  about  250 
farmers  were  shipping  over  the  Chicago  and  Northwestern,  but  that 
only  a  very  few  were  sending  milk  over  the  New  York  Central.  The 
Atchison,  Topeka  and  Santa  Fe  and  the  Chicago,  Rock  Island  and 
Pacific  reported  that  the  milk  business  over  their  lines  was  handled  by 


'Letters  from  Mr.  E.  C.  Rockwell,  Secretary,  Milk  Producers'  Association,  July  11, 
1923,  and  October  11,  1923. 


476  BULLETIN  No.  269  \June, 

the  American  Railway  Express  Company,  so  it  may  well  be  assumed 
that  the  volume  of  milk  handled  over  these  lines  is  light.  The  Chicago 
and  Eastern  Illinois  and  the  Michigan  Central  reported  no  farmers 
shipping. 

The  number  of  can-shippers  in  the  Chicago  district  may  be  esti- 
mated from  the  preceding  figures  at  something  less  than  2,000.  There 
are  undoubtedly  far  fewer  at  present  than  there  were  a  few  years  ago, 
a  large  falling  off  having  resulted  from  the  introduction  of  the  motor 
truck.  It  is  highly  probable  that  the  number  will  continue  to  decrease 
as  the  use  of  motor  trucks  increases. 

Increased  Use  of  Motor  Trucks. — Within  the  last  decade  there  has 
been  a  rapid  development  in  the  use  of  motor  trucks  to  transport  milk 
from  the  country  to  Chicago.  As  the  hard  road  system  is  extended,  this 
method  of  transportation  will  become  increasingly  important  in  that 
part  of  the  district  which  is  near  enough  the  city  to  make  its  use 
practicable.  Truck  hauling  has  certain  advantages  over  rail  transporta- 
tion and  producers  in  the  inner  district  thereby  enjoy  an  additional 
advantage  over  those  in  the  more  remote  zones. 

In  July,  1923,  a  survey1  of  the  dealers  indicated  that  at  least 
75  trucks  were  being  used  to  pick  up  milk  in  the  country.  Data  on 
about  40  of  these  showed  that  they  were  hauling  a  total  of  about  280,000 
pounds  of  milk  each  day,  but  as  this  was  the  season  of  light  production 
practically  all  dealers  reported  that  much  heavier  loads  were  hauled 
during  the  rest  of  the  year.  In  addition  to  these  trucks  hauling  milk  in 
cans,  seven  tank  trucks  were  reported  as  bringing  in  about  100,000 
pounds  of  milk  daily  from  bulk  receiving  stations.  Some  of  these  trucks 
made  two  trips  a  day. 

The  trucks  which  pick  up  the  cans  of  milk  at  the  farms  or  from 
stands  along  the  truck  routes  are  commonly  of  3.5  tons  capacity  but 
usually  carry  an  overload.  The  number  of  cans  hauled  varies  with  the 
season  and  the  size  of  the  truck,  100  cans  being  a  fair  average  for  trucks 
of  this  size.  Table  4  shows  the  range  in  the  size  of  loads  during  the 
period  of  shortage.  During  the  surplus  season,  however,  as  many  as  160 
cans  are  hauled  on  a  single  truck.  Loads  in  excess  of  the  weight 
limit  set  by  the  state  road  law2  are  common  and  arrests  for  violations 
are  not  infrequent.  This  is  particularly  true  in  the  case  of  four-wheeled 
glass-lined  tank  trucks  of  1,500  gallons  capacity. 

The  average  distance  milk  is  hauled  by  the  can  trucks  is  about 
twenty-five  to  thirty  miles,  altho  one  truck  was  reported  as  hauling  milk 
from  a  point  fifty  miles  from  the  city.  The  mileage  of  16  trucks  haul- 

*Data  collected  by  Mr.  H.  F.  Hall  of  the  Department  of  Dairy  Husbandry, 
University  of  Illinois. 

*The  maximum  weight  allowed  for  vehicle  and  load  is  24,000  pounds,  or  32,000 
pounds  if  trailer  or  semi-trailer  is  used.  In  either  case,  the  weight  on  one  axle  cannot 
be  more  than  16,000  pounds. 


7925] 


MARKETING  MILK  IN  CHICAGO  DAIRY  DISTRICT 


477 


ing  milk  for  9  different  companies  is  shown  by  Table  5.  Because  of  the 
greater  amount  of  milk  hauled,  tank  trucks  are  more  economical  for 
long  hauls  than  are  the  can  trucks,  but  the  tank  trucks  require  country 
plants  where  the  milk  can  be  cooled  and  are  therefore  not  used  by  the 
smaller  dealers. 

In  most  instances  milk  dealers  do  not  own  the  trucks,  but  pay  the 
trucking  company  an  agreed  price  per  can,  which  usually  corresponds 

TABLE  4. — NUMBER  OF  EIGHT-GALLON  CANS  OF  MILK  HAULED  PER  TRUCK 


Group 

Number  of 
cans  per 
truck 

Number 
of 
trucks 

Percentage  of 
total  number 
of  trucks 

1  

81  to    90 

11 

50  0 

2  

91  to  100 

1 

4.5 

3  

101  to  110 

4 

18  2 

4  

111  to  120 

2 

9  1 

5  

121  to  130 

2 

9.1 

6  

131  and  over 

2 

9  1 

Total.. 

22 

100.0 

to  the  rate  for  rail  shipments.  Table  5  indicates  the  cost  of  the  two 
methods.  It  must  be  remembered  that  with  rail  shipments  most  dealers 
have  the  additional  cost  of  trucking  the  milk  from  the  unloading  plat- 
forms in  Chicago  to  their  bottling  plants.  With  truck  hauling  this  cost 
is  avoided.  Even  with  the  plant  located  on  a  railroad,  the  latter  method 
permits  greater  convenience  in  unloading  if  the  dealer  arranges  for  his 
trucks  to  arrive  at  different  times.  This  avoids  the  peak  load  of  labor 
which  occurs  upon  the  arrival  of  the  milk  train. 

TABLE  5. — DISTANCES  MILK  is  HAULED  BY  MOTOR  TRUCK  AND  RATE  CHARGED  PER 

EIGHT-GALLON  CAN 


Company 

Number  of 
trucks 

Mileage 
one  way 

Rate  per  8-gallon  can 

Motor  truck 

Rail  shipment 

1  

4 

2 
2 

1 

1 
1 

2 
1 

1 

miles 
23 
25 
26 
30 
30 
35 
35 
50 
31 
21 
20 
32 
25 
28 

cents 
21 
21 
21 
21 
24 
30 
25 
28 
21 
20.5 
20.5 
25 
20 
25 

cents 
21 
21 
21 
21 
24 
30 
25 
28 
21 
20.5 
20.5 
24 
21 
25 

2  

3  

4  

5  

6  

7  

8  

9  

Average  

29.3 

23.1 

23.1 

478  BULLETIN  No.  269  [/««-?, 

No  data  were  available  on  the  cost  of  operating  tank  trucks,  altho 
one  dealer  reported  a  contract  with  a  trucking  company  operating  two 
trucks,  each  having  a  capacity  of  1,500  gallons.  The  trucking  company 
owned  all  transportation  equipment  and  assumed  all  road  responsibility. 
The  rate  charged  was  30  cents  a  hundred  pounds  for  a  50-mile  haul. 
The  rail  rate  from  this  country  plant  was  33  cents  a  hundred  pounds. 
In  addition  to  the  saving  in  rates  by  tank  trucks,  the  dealer  avoided  the 
cost  of  cans  and  the  cost  of  trucking  the  milk  from  the  unloading 
platform  in  the  city  to  his  bottling  plant. 

With  the  present  high  transportation  rates  it  would  appear  that 
where  tank  trucks  or  tank  cars  can  be  used,  the  logical  thing  to  do  is  to 
convert  the  country  bottling  plants  into  bulk  receiving  stations  and  avoid 
the  cost  of  hauling  bottles  back  and  forth  between  country  and  city. 

There  is  every  reason  to  believe  that  the  trucking  of  milk  to 
Chicago  will  increase,  and  to  the  extent  that  trucks  lower  the  cost  of 
transportation  or  add  to  the  convenience  of  the  dealers,  the  near-by 
producers  will  have  an  advantage  over  the  more  distant  dairymen  and 
the  extension  of  the  district  will  thereby  be  retarded. 

INTENSITY  OF  DAIRYING  IN  THE  INNER  AND  OUTER 
PARTS  OF  THE  CHICAGO  DAIRY  DISTRICT 

Some  idea  of  the  intensity  of  dairying  in  the  Chicago  district  may 
be  obtained  from  figures  based  on  a  census  of  3,406  dairy  farms.1 
These  farms  show  the  greatest  variability  in  character  and  organization. 
The  range  is  from  small  to  large  farms,  from  scrub  cows  to  record- 
breaking  and  prize-winning  purebreds,  from  the  keeping  of  a  few  cows 
as  a  side  line  to  the  maintenance  of  very  large  herds  and  the  employ- 
ment of  intensive  methods.  The  variation  is  not  great  enough,  however, 
to  lessen  the  significance  of  these  figures  showing  the  average  dairy  farm 
unit  from  which  Chicago's  milk  supply  is  obtained.  In  Table  6  these 
figures  have  been  grouped  to  show  the  differences  between  the  average 
farm  in  the  inner,  or  the  most  intensive  part  of  the  district,  and  the 
average  farm  in  the  outer  but  not  the  most  distant  region. 

There  is  no  significant  difference  between  these  two  regions  in  the 
size  of  farms  or  in  the  percentage  of  tenancy.  The  greater  intensity  of 
dairying  in  the  inner  district  is  shown,  however,  by  the  larger  size  of 
the  herds  maintained — 20  cows  and  6  heifers  as  compared  with  13  cows 
and  4  heifers  in  the  outer  district.  The  ratio  of  heifers  to  cows  is  one 
to  three  in  both  regions.  The  predominance  of  the  latter  is  too  great 
to  maintain  the  herds  without  the  purchase  of  some  additional  cows. 
The  annual  production  of  milk  per  cow,  as  indicated  by  the  sale  of  milk, 
is  700  pounds  higher  in  the  inner  district.  The  farms  in  the  latter  region 
are  also  better  equipped,  as  is  shown  by  the  number  of  silos,  milking 
machines,  and  power  pumps. 


'Taken  biennially  by  company  inspectors. 


1925} 


MARKETING  MILK  IN  CHICAGO  DAIRY  DISTRICT 


479 


Undoubtedly  greater  differences  would  be  observed  if  the  compari- 
son were  made  between  the  farms  of  the  inner  district  and  those  on  the 
margin,  but  the  latter  would  represent  but  a  small  part  of  the  source  of 
supply. 

TABLE  6. — COMPARISON  OF  AVERAGE  DAIRY  FARM  IN  INNER,  OR  MOST  INTENSIVE, 
PART  OF  CHICAGO  DAIRY  DISTRICT  AND  AVERAGE  DAIRY  FARM  IN  OUTER 
PART  OF  DISTRICT,  1922 


Section  of  dairy  district  

INNER 

OUTER 

Counties  included  

Cook,  Lake, 
Kane,  and 
McHenry, 
111. 

Will,  DeKalb, 
Ogle,   and 
Boone,   111.; 
Kenosha, 
Rock,  and 
Green,  Wis. 

Total  number  of  milk  plants  or  stations  included  

20 
1  863 

40 
60 

136 

16 
4 
20 

23 
5  701 

3 
3 
6 

90 
19 

72 

10 
I  543 

46 

54 

131 

10 
3 
13 

22 
4  997 

2 
2 
4 

74 
13 
64 

Total  number  of  dairy  farms  included  

Percentage  of  dairymen  that  are  tenants*  

Percentage  of  dairymen  that  are  owners8  

Average  number  of  acres  per  farm  

Average  number  of  cows  per  farm  (milking)  

Average  number  of  cows  per  farm  (dry)  

Average  number  of  cows  per  farm  (total)  

Average  pounds  of  milk  sold  daily  per  cow  (milking)*1  

Average  pounds  of  milk  sold  annually  per  cow  (total)0  

Average  number  of  heifers  per  farm  (over  1  year)  

Average  number  of  heifers  per  farm  (under  1  year)  

Average  number  of  heifers  per  farm  (total)  

Average  number  of  silos  for  each  100  farms  

Average  number  of  milking  machines  for  each  100  farms..  .  . 
Average  number  of  power  pumps  for  each  100  farms  

"The  percentage  of  tenancy  for  the  outer  district  is  based  on  data  obtained  from 
seven  country  plants  instead  of  ten. 

bAt  the  time  the  data  were  collected,  May,  1922. 

''Obtained  by  dividing  the  total  amount  of  milk  sold  in  1922  by  the  total  number"of 
cows  on  the  farms  in  May,  1922. 


MILK  PRODUCTION  IN  THE  CHICAGO  DAIRY  DISTRICT 

In  order  to  understand  the  situation  which  exists  today  in  the 
Chicago  milk  market  it  is  necessary  to  examine  the  events  of  the  last 
few  years  which  have  brought  about  the  present  conditions. 

Dairying  is  much  more  sensitive  to  economic  changes  which  affect 
its  relative  profitableness  than  is  the  growing  of  crops.  For  instance,  if 
the  price  of  corn  suddenly  advances  until  it  is  relatively  much  higher 
than  the  price  of  wheat,  the  acreage  of  wheat  cannot  be  decreased  nor 
the  acreage  of  corn  increased  until  the  next  planting  season.  On  the 
other  hand,  if  the  price  of  corn  advances  until  it  is  relatively  much 


480 


BULLETIN  No.  269 


[fane, 


higher  than  the  price  of  milk,  the  dairy  farmer  can  immediately  make 
an  adjustment  in  his  business.  He  can  feed  a  lighter  ration  or  send 
some  of  his  poorest  cows  to  the  stockyards  and  sell  the  corn  which 
would  otherwise  have  been  turned  into  milk.  In  either  case,  the  produc- 
tion of  milk  is  decreased.  This  is  exactly  what  happened  during  the 
period  of  the  war. 

VARIATION  FROM  YEAR  TO  YEAR 

In  September,  1917,  the  price  of  corn1  was  approximately  200  per- 
cent higher  than  the  pre-war  average.    Milk,   however,  was  only  59 

TABLE  7. — VARIATION  IN  AVERAGE  AMOUNT  OF  MILK  SOLD  ANNUALLY  PER  FARM 
Note  temporary  decrease  in  production  of  milk  during  the  period  of  the  war 


Year 

Number  of  farms 

"Average  amount  of  milk  sold 
anually  per  farm 

1913  

1  549 
1  740 

1  853 
1  988 
1  897 
1  722 
1  727 
1  741 
1  773 
1  833 

IDS. 
89  800 
94  600 
95  400 
93  000 
83  400 
73  700 
85  300 
86  800 
92  400 
96  400 

perct.  of  1913 
100  0 
105.3 
106.2 
103.6 
92.9 
82.1 
95.0 
96.7 
102.9 
107.3 

1914  

1915  

1916  

1917  

1918  

1919  

1920  

1921  

1922  

"Based  on  the  average  sales  to  eighteen  country  plants.    The  same 
plants  are  used  thruout  the  entire  ten-year  period. 

percent  higher.  This  was  probably  the  month  of  greatest  difference  in 
the  price  of  milk  and  corn,  but  the  continued  high  price  of  feed  and 
labor  made  dairying  relatively  unprofitable  for  some  time.  The  result 
was  a  curtailment  in  the  amount  of  milk  produced.  Many  dairymen 
actually  discontinued  the  business,  but  the, greatest  decrease  in  produc- 
tion came  from  the  sale  of  a  part  of  their  cows  and  the  lighter  feeding 
of  the  rest  by  those  men  who  remained  in  the  business. 

Table  7  shows  the  extent  of  this  decrease  in  production.  From 
1913  to  1916  the  average  sale  of  milk  to  eighteen  country  plants  by 
some  1,800  farmers  ranged  from  about  90,000  to  95,000  pounds  of  milk 
yearly  per  farm.  In  1917  the  amount  dropped  to  about  83,000  pounds 
and  in  1918  to  less  than  74,000  pounds.  The  total  number  of  farmers 
selling  milk  to  these  plants  also  decreased  during  this  period,  but  it 
must  not  be  concluded  that  all  the  dairymen  who  discontinued  selling 
to  these  plants  sold  their  cows;  undoubtedly,  some  of  the  number 
merely  changed  to  direct  shipments  or  to  trucking,  which  was  rapidly 
gaining  favor. 


*No.  2  yellow  corn  at  Chicago. 


19251  MARKETING  MILK  IN  CHICAGO  DAIRY  DISTRICT  481 

Per  capita  consumption  of  milk  also  declined  during  this  period, 
but  not  to  the  same  extent  as  production.  The  increase  in  population 
tended  to  offset  the  decreased  consumption  and  the  dealers  were  faced 
with  the  necessity  of  obtaining  approximately  the  usual  amount  of  milk. 
Since  the  production  per  farm  was  low  (less  than  four-fifths  as  much  as 
the  four-year  average,  1913  to  1916)  additional  territory  had  to  be 
opened.  Plants  were  started  in  many  new  localities  in  1918  and  the 
dairy  district  advanced  farther  into  the  surplus  producing  region.  The 
next  year,  however,  the  production  of  milk  in  the  old  territory  was 
about  15  percent  greater  than  in  1918,  and  by  1922  it  was  31  percent 
higher  than  before  the  war-time  slump.  This  large  increase  in  the 
amount  produced  in  the  old  territory  and  the  large  supply  of  milk 
coming  from  the  new  territory  made  it  inevitable  that  a  tremendous 
surplus  would  result. 

That  these  changes  in  production  per  farm  were  due  both  to 
variations  in  the  size  of  the  herds  and  to  changes  in  the  rate  of  feeding 
is  shown  by  Table  8.  The  average  number  of  cows  per  farm  in  1918 
was  12.6  percent  less  than  in  1913.  The  production  of  milk  per  cow 
also  decreased  6.5  percent  during  the  same  period.  By  1920,  higher 
milk  prices  had  resulted  in  increases  over  1918  in  both  the  size  of  the 
herds  and  in  the  average  production  per  cow.  Very  low  prices  for 
milk  during  1921  and  1922  not  only  checked  the  increase  in  the  average 
size  of  herds,  but  even  resulted  in  a  slight  decrease  in  1922.  The  pro- 
duction of  milk  per  cow,  however,  was  greatly  increased,  because  the 
farm  value  of  grain  and  hay  was  relatively  lower  than  milk.  Even  with 
the  prevailing  milk  prices,  dairymen  found  it  profitable  to  market  as 
large  a  proportion  of  their  crops  thru  the  cows  as  was  possible. 

This  table  suggests  the  reason  why  prices  of  dairy  products  do  not 
exhibit  well-defined  cycles  such  as  are  shown  by  prices  of  beef  cattle, 
hogs,  and  horses.  Prices  of  these  classes  of  livestock  tend  to  rise  and 
fall  over  a  period  of  years  with  considerable  regularity  because  of 
alternate  periods  of  over-  and  underproduction.  In  all  probability,  there 
are  similar  periods  of  over-  and  underproduction  of  dairy  cattle,  but  the 
production  of  milk  is  not  directly  determined  by  the  number  of  cows 
since  changes  in  the  rate  of  feeding  may  offset  changes  in  the  number 
of  cows.  Thus,  the  average  size  of  a  herd  in  the  Chicago  district  in 
1922  was  only  1  percent  greater  than  in  1918,  but  the  production  of 
milk  per  cow  was  29  percent  greater.  The  relative  elasticity  of  the  two 
factors  is  indicated  by  the  coefficients  of  variability  for  the  data  cover- 
ing these  six  years. 

Average  number  of  cows  per  farm 5.93  ±  1.15 

Average  production  of  milk  per  cow 8.83  ±  1.72 

The  effect  of  economic  conditions  is  also  shown  in  the  number 
of  heifers  kept  on  these  farms.  1916  showed  an  increase  over  1913,  but 
the  unfavorable  outlook  for  dairying  in  1917  and  1918  resulted  in  the 
keeping  of  fewer  heifer  calves.  The  average  number  of  heifers  over  one 


482 


BULLETIN  No.  269 


[June, 


TABLE  8.  —  CHANGES  IN  NUMBER  OF  DAIRY  CATTLE  PER  FARM  AND  IN  PRODUCTION  OF  MILK.  PER  Cow  DUE  TO  ECONOMIC  CAUSES 
Based  on  surveys  of  all  farms  selling  milk  to  fifteen  country  plants  in  Chicago  dairy  district 

3    £ 

T3    0 

8  ° 

Si 
rt5  ° 

S3  e 

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.7925]  MARKETING  MILK  IN  CHICAGO  DAIRY  DISTRICT  483 

year  old  in  1918  was  23.3  percent  less  than  in  1913,  while  the  average 
under  one  year  old  was  34.1  percent  below.  The  number  of  heifers 
continued  to  decrease  even  thru  the  period  of  high  milk  prices  (1918, 
1919,  and  1920),  and  only  a  slight  increase  is  shown  for  heifers  under 
one  year  old,  in  1922.  It  is  to  be  expected  that  a  certain  amount  of  lag 
behind  milk  prices  would  be  found,  but  the  long  continued  decrease  in 
the  raising  of  heifers  indicates  other  restraining  factors.  The  very  poor 
market  for  dairy  cattle  during  1921  and  1922  permitted  the  purchase  of 
excellent  cows  at  low  prices  and  this  undoubtedly  tended  to  discourage 
the  raising  of  young  stock.  It  is  possible  that  this  period  may  mark  a 
permanent  change  in  the  method  of  maintaining  the  herds  in  the  inner 
part  of  the  Chicago  district,  and  that  the  ratio  of  heifers  to  cows  will 
never  again  be  as  large  as  it  was  in  1916.  It  is  quite  probable,  however, 
that  the  ratio  will  increase  until  it  is  somewhat  greater  than  it  was  in 
1922. 

The  effects  of  the  heavy  production  of  milk  in  1921  and  1922  were 
made  worse  by  the  demoralized  condition  of  the  condensed  milk  market. 
In  October,  1920,  many  condenseries  closed  and  others  made  drastic 
cuts  in  the  prices  paid  for  milk.  Naturally,  some  of  the  milk  that  had 
previously  been  condensed  sought  the  Chicago  market  and  the  existing 
surplus  was  still  further  increased. 

SEASONAL  VARIATION  IN  PRODUCTION 

In  addition  to  the  variation  in  production  from  year  to  year  which 
results  from  the  combination  of  numerous  economic  factors,  there  is 
the  much  greater  seasonal  variation.  This  variation  is  an  ever  present 
problem  to  the  milk  distributor  and,  because  of  the  maladjustment  of 
supply  and  demand,  a  highly  important  factor  in  determining  the  prices 
received  by  the  producer. 

The  seasonal  variation  in  the  production  of  milk  is  shown  by  Table 
9  #nd  Fig.  5.  The  dairy  district  has  been  divided  into  sections  in  order 
to  show  some  important  differences  between  the  various  regions.  For 
example,  Cook  and  Lake  counties  show  the  least  variation,  with  Kane 
and  McHenry  counties  next.  It  is  worthy  of  note  that  the  production 
in  these  counties,  which  represent  the  most  intensive  district,  is  very 
little  greater  during  the  months  of  May  and  June  than  it  is  during 
January,  February,  March,  and  April.  On  the  other  hand,  in  the  more 
distant  parts  of  the  Chicago  dairy  district  the  production  during  May 
and  June  is  much  higher  than  during  the  other  months.  This  is  particu- 
larly true  of  the  Swiss-cheese  region  which  is  represented  by  Green  and 
LaFayette  counties.  The  winter  production  in  this  region  is  extremely 
low,  the  amount  produced  in  December  being  but  44  percent  of  the 
June  production. 

The  greater  seasonal  variation  in  production  in  the  surplus-milk 
region  is  another  factor  which  tends  to  retard  the  extension  of  the 
Chicago  dairy  district  and  gives  the  producers  in  the  inner  district  an 


484 


BULLETIN  No.  269 


[June, 


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MARKETING  MILK  IN  CHICAGO  DAIRY  DISTRICT 


485 


advantage  because  of  their  greater  seasonal  uniformity.  It  must  be 
remembered,  however,  that  the  newer  regions  can  adjust  their  pro- 
duction to  the  changed  conditions  which  a  fluid-milk  market  imposes. 

The  most  striking  feature  of  the  seasonal  variation  is  the  low  pro- 
duction during  the  months  of  July,  August,  and  September.    At  this 


Group  I  -  Cook  f  Lake  Counties,  ////no/3 

Group  2-  Kan*  fMc/fenry  Counties.  Illinois 

Group  3  -  Will.  Deftalb.  Ogle.  9  Boon*  Counties.  Illinois 

Group  4  -  Kenosha.  Waukesha  if  Rock  Counties.  Wisconsin 

Group  5-Grte/i  $  Lafayette  Counties.  Wisconsin 


120 
110 
100 
90 
60 
70 
60 
50 
40 
30 
20 
10 


Jan.        fth       Mar.      Apr.      Hay    June     July      Aug.     Sept.       Oct.      Nov.        Dec. 


FIG.  5. — SEASONAL  VARIATION  IN  PRODUCTION  OF  MILK  IN  DIFFERENT 
PARTS  OF  THE  CHICAGO  DAIRY  DISTRICT 

The  graph  represents  the  amounts  of  milk  sold  from  an  average 
of  3,051  farms  during  the  three-year  period  1920  to  1922.  The  average 
monthly  sales  for  thirty-six  months  equal  100  percent.  The  least 
seasonal  variation  is  found  in  the  inner  district  (Groups  1  and  2). 
Altho  the  variation  in  the  Swiss-cheese  region  (Group  5)  is  very 
marked,  the  proportion  of  milk  produced  during  the  shortage  period  in 
the  late  summer  is  greater  than  for  any  of  the  other  districts.  Some 
dealers  draw  on  this  territory  to  supplement  their  supply  at  that  time. 

time  flies  are  bad,  pastures  are  short,  few  dairymen  have  sufficient 
silage  for  summer  feeding,  and  the  fall-  and  winter-freshening  cows  are 
well  advanced  in  the  lactation  period. 

If  a  dealer's  regular  supply  of  milk  from  the  country  is  sufficient 
for  his  needs  during  this  period,  it  means  that  his  surplus  is  very  large 
during  the  season  of  heavy  production.  In  order  to  avoid  this  surplus 
he  may  depend  on  jobbers  or  other  dealers  for  a  part  of  his  supply  dur- 
ing the  summer,  but  the  number  of  companies  which  can  follow  this 
practice  is,  of  course,  limited. 

In  addition  to  the  preceding  figures,  which  are  based  on  detailed 
data  taken  from  the  books  of  three  large  companies,  supplementary 


486 


BULLETIN  No.  269 


{June, 


figures  showing  the  range  in  the  seasonal  production  for  1922  were 
obtained  by  a  survey  of  64  dealers.  During  the  season  of  low  production 
(August  and  September)  the  combined  daily  purchases  of  these  com- 
panies amounted  to  1,476,978  pounds  of  milk.  Their  purchases  during 
the  season  of  heaviest  production  (May  and  June)  totaled  2,128,086 
pounds  per  day,  or  44.1  percent  more  than  the  purchases  during  the 
shortage  period. 

Table  10  shows  the  differences  between  the  purchases  for  May  and 
June  and  for  August  and  September  for  companies  of  various  sizes.  As 
would  be  expected,  the  smaller  companies  have  in  general  the  least 
variation  in  purchases,  because  they  get  practically  all  their  supply  from 
the  inner  district,  where  the  seasonal  production  is  most  nearly  uniform. 
Group  4,  in  which  are  classed  dealers  purchasing  from  20,001  to  30,000 


TABLE  10.- 


-DlFFERENCE  IN  AMOUNTS  OF  MlLK  PRODUCED  DURING  SEASON  OF  HEAVY 
PRODUCTION  AND  SEASON  OF  LEAST  PRODUCTION 


Ratio  of  May 

Group 

Volume  handled 
daily  per  dealer, 
May  and  June 

Number 
of 
dealers 

Total  daily 
purchases, 
May  and 
June,  1922 

Total  daily 
purchases, 
Aug.  and 
Sept.,  1922 

and  June  pur- 
chases   to 
Aug.  and 
Sept.   pur- 

chases 

Ibs. 

Ibs. 

Ibs. 

perct. 

1  

Less  than    5  000 

23 

53  312 

43  942 

121  3 

2  

5  001  to  10  000 

10 

79  650 

66  114 

120  5 

3  

10  001  to  20  000 

12 

207  641 

149  829 

138  6 

4  

20  001  to  30  000 

5 

115  580 

94  060 

122  9 

5  

30  001  to  40  000 

8 

279  325 

194  872 

143.3 

6  

Over  40  000 

6 

1  392  578 

928  161 

150  0 

Total... 

* 

64 

2  128  086 

1  476  978 

144.1 

pounds  of  milk  daily,  shows,  however,  less  variation  in  the  seasonal 
purchases  than  does  Group  3,  which  handles  less  milk.  The  more 
uniform  supply  of  Group  4  is  easily  accounted  for  by  the  chance 
grouping  of  five  dealers  who  receive  from  the  inner  district  93  percent 
of  all  the  milk  which  they  purchase.  Group  3,  on  the  other  hand, 
includes  twelve  dealers,  some  of  whom  purchased  milk  in  Wisconsin, 
where  the  seasonal  production  shows  greater  variation. 

The  six  large  dealers  who  purchase  milk  from  all  parts  of  the  dairy 
district  had  the  greatest  seasonal  variation.  During  the  flush  season 
(May  and  June)  they  received  one  and  one-half  times  as  much  milk  as 
during  the  shortage  season  (August  and  September). 

In  view  of  the  large  volume  of  milk  handled  by  these  64  dealers  it 
appears  safe  to  conclude  that  in  1922  the  May  and  June  production  in 
the  Chicago  dairy  district  as  a  whole  was  approximately  44  percent 
greater  than  the  August  and  September  production.  This  proportion 
varies,  of  course,  for  individual  companies  and  in  different  years. 

A  few  dealers  who  obtain  the  greater  part  of  their  supply  from  the 


MARKETING  MILK  IN  CHICAGO  DAIRY  DISTRICT 


487 


inner  district  have  found  it  advantageous  to  establish  one  or  more 
plants  in  the  cheese  districts,  where  spring-freshening  cows  predominate 
and  where  the  bulk  of  the  year's  production  comes  during  the  pasture 
period.  Altho  this  still  further  increases  the  May  and  June  surplus,  it 
supplements  the  short  supply  from  the  inner  district  during  the  summer 
months.  Green  and  LaFayette  counties,  Wisconsin,  (Fig.  5)  are 
illustrations  of  counties  which  show  a  much  higher  production  in  July, 
August,  and  September  than  any  of  the  other  districts. 

SEASONAL  PRODUCTION  AND  PRICE 

Since  1919,  dealers  and  producers  have  attempted  to  obtain  a  more 
uniform  production  of  milk  thruout  the  year  by  changing  the  relative 

TABLE  11. — SEASONAL  VARIATION  IN  PRICE  OF  3.5-PERCENT  MILK  AT  COUNTRY  STATIONS 

IN  CHICAGO  DISTRICT  BY  FIVE-YEAR  PERIODS,  1904  TO  1923* 
Average  monthly  price  for  each  60-month  period  =  100  percent 


Month 

1904 
to 
1908 

1909 
to 
1913 

1914 
to 
1918 

1919 
to 
1923 

January  

pent. 
123  0 

perct. 
119  5 

perct. 
113  4 

perct. 
106  8 

February  

118  3 

116  1 

107  1 

101  8 

March  

109.6 

106.2 

99.9 

94.8 

April  

99.3 

92.9 

99.2 

92.8 

May  

75.7 

76.3 

81.8 

87.8 

June  

67  0 

68.4 

70.1 

87.0 

July... 

74  9 

82.3 

87.1 

103.0 

August  

89  9 

91  6 

98.7 

110  0 

September  

97  8 

95  6 

99  5 

102.9 

October  

108.8 

109.5 

111.2 

106.0 

November  

115.9 

118.8 

f!6.0 

105.1 

December  

119.8 

122.8 

116.0 

102.0 

Average  

100.0 

100.0 

100.0 

100.0 

''Corrected  for  secular  trend. 

levels  of  winter  and  summer  prices.  This  is  shown  by  Table  11,  which 
shows  the  seasonal  variation  in  milk  prices  by  five-year  periods  from 
1904  to  1923.  Until  1919,  the  winter  price  of  milk  was  very  high  as 
compared  with  the  spring  and  summer  prices,  and  winter  dairying  was 
stimulated.  The  result,  as  previously  discussed,  was  too  much  winter 
milk  and  a  sharp  decline  in  production  in  the  late  summer.  Beginning 
with  1919,  milk  prices  for  the  months  of  May,  June,  July,  August,  and 
September  have  been  relatively  much  higher  than  before,  while  the 
winter  prices  have  been  relatively  lower. 

This  change  in  the  relative  prices  for  summer  and  winter  has 
apparently  had  little  effect  on  the  seasonal  production  of  milk  in  the 
inner  part  of  the  dairy  district,  as  may  be  seen  by  Table  12.  In  spite 
of  the  greater  seasonal  uniformity  in  prices,  which  has  been  maintained 
since  1919,  the  high  winter  production  continues.  Tho  this  may  be 


488 


BULLETIN  No.  269 


[June, 


TABLE  12. — SEASONAL  VARIATION  IN  AMOUNT  OF  MILK  PRODUCED  IN  INNER  PART  OF 
CHICAGO  DAIRY  DISTRICT  BY  FIVE-YEAR  PERIODS,  1908  TO  1922* 
Average  monthly  sales  for  each  60-month  period  =  100  percent 


Month 

Average  daily  sales  of  milk  per  farm 

1908  to  1912 

1913  to  1917 

1918  to  1922 

January  

Ibs. 
395 
403 
401 
395 
412 
419 
324 
269 
292 
305 
326 
368 

perct. 
110.0 
112.2 
111.7 
110.0 
114.8 
116.7 
90.2 
74.9 
81.3 
84.9 
90.8 
102.5 

Ibs. 
390 
406 
395 
391 
404 
417 
327 
283 
111 
290 
316 
355 

perct. 
110.1 
114.6 
111.5 
110.4 
114.1 
117.7 
92.3 
79.8 
78.2 
81.9 
89.2 
100.2 

Ibs. 
391 
407 
419 
403 
415 
405 
310 
281 
287 
316 
343 
383 

perct. 
107.6 
112.0 
115.3 
110.9 
114.2 
111.5 
85.3 
77.3 
79.2 
86.9 
94.4 
105.4 

February. 

March  .- 

April  

May  

June  

July... 

August  

September  

October  

November  

December  

Averaee.  . 

359 

100.0 

354 

100.0 

363 

100.0 

"Based  on  sales  from  an  average  of  544  farms  to  seven  plants  in  Lake,  Kane,  and 
McHenry  counties,  Illinois. 


TABLE  13. — SEASONAL  DISTRIBUTION  OF  FRESHENING  Cows  AS  INDICATED  BY  RECORDS 

FROM  FIFTEEN  COW-TESTING  ASSOCIATIONS  IN  NORTHERN  ILLINOIS* 
Number  of  cows  freshening  each  month  expressed  as  percentages  of  total  for  year 


Month 

Group  1 
Cook  and 
Lake 
counties 

Group  2 
Kane, 
McHenry, 
and   DuPage 
counties 

Group  3 
DeKalb, 
Ogle,  Boone, 
and    Winne- 
bago  counties 

All 

January  

No.* 
274 
289 
290 
191 
171 
128 
133 
124 
258 
340 
329 
294 

perct. 
9.7 
10.2 
10.3 
6.8 
6.1 
4.5 
4.7 
4.4 
9.1 
12.1 
11.7 
10.4 

No. 
407 
349 
370 
244 
217 
168 
205 
295 
443 
499 
438 
394 

perct. 
10.1 
8.7 
9.1 
6.0 
5.4 
4.2 
5.1 
7.3 
11.0 
12.4 
10.9 
9.8 

No. 
163 
97 
86 
100 
49 
42 
49 
87 
234 
295 
228 
192 

perct. 
10.0 
6.0 
5.3 
6.2 
3.0 
2.6 
3.0 
5.4 
14.4 
18.2 
14.1 
11.8 

N«. 

844 
735 
746 
535 
437 
338 
387 
506 
935 
1134 
995 
880 

perct. 
10.0 
8.7 
8.8 
6.3 
5.2 
4.0 
4.5 
6.0 
11.0 
13.4 
11.7 
10.4 

February  

March  

April  

May  

June  

July... 

August  

September  

October  

November  

December  

Total  

2821 

100.0 

4029 

100.0 

1622 

100.0 

8472 

100.0 

"Acknowledgment  is  due  Mr.  C.  S.  Rhode,  Assistant  Professor  of  Dairy  Husbandry 
Extension,  for  his  courtesy  in  permitting  the  use  of  these  records. 

partly  due  to  the  fact  that  changes  in  farm  practice  naturally  lag 
behind  changing  price  levels,  the  principal  reason  is  the  fact  that 
summer  prices  are  not  yet  high  enough  to  induce  farmers  to  produce 
summer  milk  in  competition  with  crop  growing  in  regions  where  a  very 
large  proportion  of  the  land  is  tillable. 


1925}  MARKETING  MILK  IN  CHICAGO  DAIRY  DISTRICT  489 

The  preference  for  fall-freshening  cows  in  this  region  is  clearly 
shown  by  Table  13,  which  gives  the  months  of  freshening  of  8,472  cows 
during  the  years  1917  to  1922.  It  is  significant  that  the  least  number 
of  spring-freshening  cows  is  found  in  DeKalb,  Ogle,  Boone,  and  Winne- 
bago  counties,  where  dairying  is  of  minor  importance  and  crop  growing 
of  major  importance. 

It  is  an  open  question  whether  it  is  more  economical  to  raise  sum- 
mer prices  and  lower  winter  prices  until  a  more  uniform  seasonal 
production  is  obtained,  or  to  draw  upon  the  summer  dairying  regions  of 
Wisconsin  to  supplement  the  short  summer  and  fall  supplies.  Either 
course,  however,  is  preferable  to  the  present  situation,  which  requires 
the  carrying  of  a  large  surplus  during  the  winter  months,  when  pro- 
duction costs  are  highest.  The  present  tendency,  as  has  been  indicated, 
is  both  to  change  the  seasonal  price  levels  and  to  draw  on  the  summer 
dairies  of  Wisconsin. 

CONSUMPTION  OF  DAIRY  PRODUCTS  IN  CHICAGO 

When  the  present  study  was  undertaken,  it  was  hoped  that  accurate 
information  on  the  per  capita  consumption  of  milk  in  Chicago  could  be 
obtained.  The  difficulty  of  securing  complete  enough  figures,  however, 
made  impossible  anything  but  an  estimate.  Figures  were  obtained  from 
retail  routes  showing  the  average  daily  sales  of  milk  per  family.  The 
data  included  sales  to  7,743  families  in  one  section  of  Chicago  and  to 
8,511  families  in  another  part  of  the  city.  The  first  section  embraces 
one  of  the  better  residential  districts,  where  the  people  have  incomes 
sufficient  for  the  luxuries  of  life;  some  may  be  classed  as  wealthy, 
while  many  are  prosperous  business  or  professional  men.  In  the  second 
district  the  incomes  are  smaller,  being  derived  largely  from  clerical  and 
factory  employment.  Altho  not  one  of  the  poorest  sections  of  the  city, 
this  district  ranks  somewhat  below  the  other. 

During  January,  1923,  the  average  daily  retail  sales  of  milk 
amounted  to  1.65  pints  per  family  in  the  wealthier  section  of  the  city. 
In  the  poorer  district,  the  sales  were  almost  20  percent  greater,  or  1.96 
pints  per  family.  The  larger  consumption  per  family  in  the  poorer 
section  may  be  due,  on  the  one  hand,  to  the  fact  that  a  family  with  a 
small  income  exercising  the  greatest  care  in  its  expenditure  feels  that  it 
gets  full  value  from  the  purchase  of  milk,  and  on  the  other  hand,  to 
the  number  of  children  per  family. 

By  making  proper  allowances  for  the  amount  of  milk  and  cream 
purchased  at  wholesale  (Table  14),  it  is  possible  to  compute  the  per 
capita  consumption  for  the  city  as  a  whole  if  it  is  assumed  that  these 
16,254  families  are  typical.  Such  an  assumption,  of  course,  is  open  to 
question,  but  under  the  circumstances  it  is  the  best  approach  to  an 
estimate.  Assuming  further  that  these  families  were  of  average  size 
(4.33  persons  each)1  and  consumed  the  average  amount  of  dairy 

'United  States  Bureau  of  the  Census. 


490 


BULLETIN  No.  269 


[funt, 


products,  the  daily  per  capita  consumption  of  milk  would  be  only  0.62 
pounds,  and  of  milk  and  cream  in  terms  of  3.5-percent  milk,  1.01 
pounds. 

Altho  the  foregoing  figures  on  the  per  capita  consumption  are  some- 
what unsatisfactory  because  of  the  relatively  small  proportion  of  the 
population  which  is  included,  a  very  large  mass  of  data  was  obtained 
which  gives  accurate  information  on  the  aggregate  demands  of  this 
market.  Ths  following  data  cover  the  entire  city  and  because  of  the 
large  amount  of  business  represented  may  be  taken  as  correctly  por- 
traying the  demand  for  dairy  products  in  Chicago. 

TABLE  14. — RELATIVE  CONSUMPTION  OF  CERTAIN  DAIRY  PRODUCTS  IN  CHICAGO 

Estimate  based  on  the  combined  sales  of  seventy-two  milk  dealers'*  operating  ap- 
proximately 60  percent  of  the  retail  wagons  in  Chicago 


Product 

Unit 

Total  sales  per  day 

Retail 

Whole- 
sale 

Total 

Equivalent  of 
3.5-percent  milk 

Milk.. 

Quarts 
Pints 
Half-pts. 
Quarts 
Gallons 

Half-pts. 
Half-pts. 
Gallons 
Gallons 

363  445 
95  602 

"4  182 

71  899 
29  957 

26  425 

435  344 
125  559 
26  425 
4  182 
14  093 

120  221 
9  616 
5  098 
671 

Ibs. 
935  990 
134  976 
14  203 
8  991 
121  200 

400  456 
45  859 
271  723 
51  197 

perct. 
47.2 
6.8 
.7 
.5 
6.1 

20.2 
2.3 
13.7 
2.5 

Milk  

Milk  
Certified  milk  

Bulk  milk  

14  093 
23  439 

Cream 
22-percent  

96  782 
9  616 

32-percent  

22-percent,  bulk.  .  . 
32-percent,  bulk  .  .  . 

5  098 
671 

Total  

1  984  595 

100.0 

alncluding  17  strictly  retail  dealers,  5  wholesale  dealers,  and  50  dealers  doing  both 
retail  and  wholesale  business. 

The  relative  amounts  of  milk  and  cream  consumed  in  Chicago  are 
indicated  by  Table  14.  A  limited  number  of  products  are  included  in 
the  table,  but  these  comprize  by  far  the  greatest  part  of  the  milk  con- 
sumption. It  may  be  noted  that  fluid  milk  makes  up  61.3  percent  of  the 
total  consumption  and  that  77.5  percent  of  this  amount  is  purchased  in 
quart  bottles.  On  the  basis  of  the  retail  and  wholesale  sales  of  these 
72  dealers,  it  may  be  concluded  that  about  29  pints  of  milk  and  28 
half-pints  of  "coffee"  cream  are  purchased  for  each  100  quarts  of  milk. 


CONSUMPTION  IN  DIFFERENT  SECTIONS  OF  CHICAGO 

The  foregoing  estimates  apply  to  the  consumption  of  milk  in  the 
city  as  a  whole.  As  may  be  seen  from  Table  15,  these  proportions  vary 
in  different  parts  of  Chicago  and  in  the  suburbs. 

For  purposes  of  comparison,  the  city  was  divided  into  sections 
based  on  the  territory  served  by  different  distributing  stations.  The 


1925-} 


MARKETING  MILK  IN  CHICAGO  DAIRY  DISTRICT 


491 


relative  consumption  of  dairy  products  in  a  few  representative  sections 
is  shown.  Altho  the  population  of  the  various  districts  is  not  exactly 
homogeneous  from  sociological  and  economic  standpoints,  the  pre- 
ponderance of  certain  classes  is  sufficiently  great  so  that  the  sections 
may  be  taken  as  typical  of  the  various  standards  of  living.  Thus, 
Section  A  represents  a  district  of  comfortable  homes  and  moderately 
large  incomes,  and  includes  some  districts  made-  up  largely  of  the 
Semitic  race.  Section  B  is  a  region  of  high  rentals  and  high  property 
values,  and  includes  many  apartment  hotels.  Section  C  includes  a  some- 
what mixed  native  and  foreign  population,  while  Section  D  includes 
the  Negro  district,  a  part  of  the  foreign  district  and  a  small  corner  of 

TABLE    15. — RELATIVE   CONSUMPTION  OF  CERTAIN  DAIRY  PRODUCTS  IN   DIFFERENT 

PARTS  OF  CHICAGO 

Based  on  average  retail  sales  to  more  than  200,000  families  during  the  three-year 
period  1920  to  1922 


Section  of  Chicago8 

Amount  consumed  for  each  100  quarts  of  milk 

Pints  of  milk 

Half-pints 
of  22-percent 
cream 

Half-pints 
of  32-percent 
cream 

Quarts  of 
buttermilk 

A.. 

16.5 
24.3 
23.5 
39.2 
23.7 
18.9 
15.9 

18.3 
41.5 
18.9 
39.4 
26.0     • 
20.7 
39.7 

1.8 
2.8 
1.4 
3.0 
1.9 
1.8 
3.4 

1.6 
2.7 
2.8 
8.7 
2.1 
2.1 
3.6 

B  

C  

D  

E  

Oak  Park  

Evanston  

All  of  Chicago  and 
suburbs  

28.9 

28.2 

2.4 

3.7 

*See  key  map,  Fig.  6,  for  selected  sections  of  the  city,  and  Table  F,  Appendix,  for 
monthly  consumption  data. 

the  better-class  white  section.  The  great  south-side  residential  district 
is  represented  by  Section  E.  Oak  Park  and  Evanston  are  shown  as 
representative  of  the  suburbs. 

The  consumption  of  dairy  products  in  these  districts  shows  some 
interesting  relations.  For  instance,  it  has  ordinarily  been  supposed  that 
a  pint  of  milk  was  the  usual  purchase  of  poor  families.  The  high  pro- 
portion of  pints  sold  in  Section  D  (39.2  pints  for  each  100  quarts) 
would  appear  to  substantiate  this  belief.  As  a  matter  of  fact,  however, 
the  heavy  sale  of  pints  is  due  largely  to  the  great  factory  district 
included  in  this  section.  During  the  summer,  many  factory  workers 
drink  milk  with  their  lunches  and  the  proportion  of  pints  is  thereby 
greatly  increased.  During  the  winter,  many  of  the  workers  change  to 
coffee  or  other  hot  drinks  and  the  sale  of  pints  falls  off  markedly. 

With  the  exception  of  the  district  just  mentioned,  Section  B  pur- 
chases a  greater  proportion  of  pints  than  any  other  district  shown,  altho 
it  has  practically  no  factories  and  comprizes  a  region  of  high  property 


492 


BULLETIN  No.  269 


{.June, 


Drainagt  Cana. 


values  and  high  rentals.  Far  more  wealth  is  represented  here  than  in 
Section  A,  but  the  ratio  of  pints  to  quarts  is  50  percent  greater  than  in 
the  less  affluent  district.  In  all  probability,  the  higher  consumption  of 
milk  in  Section  A  is  partly  due  to  the  large  number  of  Semitic  people 
who  are  noted  as  being,  heavy  consumers  of  milk. 

Several  milk  dealers 
have  voiced  the  opinion 
that  milk  in  pint  bottles  is 
too  expensive  for  the  poor 
and  that  the  quart  is  their 
usual  purchase.  The  data 
in  Table  15  and  the  figures 
on  the  consumption  per 
family  (page  489)  would 
tend  to  confirm  the  view, 
but  a  more  detailed  study 
than  is  here  possible  should 
be  made  before  extending 
the  above  generalization  to 
include  the  more  needy 
families. 

The  sales  of  cream,  in 
comparison  with  the  sales 
of  quarts  of  milk,  vary 
greatly  in  the  different  dis- 
tricts. It  is  not  surprising 
that  Section  A,  which  was 
classed  as  a  region  of  com- 
fortable homes  but  of  no 
great  wealth,  consumes  only 
18.3  bottles  of  22-percent 
cream  for  each  100  quarts 
of  milk,  while  the  wealthier 
and  more  fashionable  Sec- 
tion B  consumes  more  than 
twice  as  much  (41.5 
bottles).  Similarly  Oak 

Park,  which  has  a  somewhat  smaller  proportion  of  wealthy  residents 
than  Evanston,  purchases  only  20.7  half-pints  of  cream  for  each  100 
quarts  of  milk,  as  compared  with  39.7  for  Evanston.  Section  C,  which 
includes  one  of  the  poorer  sections  of  Chicago,  also  shows  relatively 
small  purchases  of  cream  (18.9  bottles).  On  the  other  hand,  Section  D, 
which  includes  the  poorest  district  in  the  city  and  is  made  up  of  a  large 
Negro  and  foreign  population,  purchases  39.4  half-pints  of  cream  for 
each  100  quarts  of  milk,  or  practically  as  much  as  Section  B  and 


FIG.  6. — MAP  OF  CHICAGO  SHOWING  SECTIONS  OF 

CITY  SELECTED  FOR  STUDYING  CONSUMPTION 

OF  DAIRY  PRODUCTS 

The  demand  for  dairy  products  is  different  in 
the  various  sections  of  the  city  because  of  economic 
and  racial  differences  in  the  population. 


1925} 


MARKETING  MILK  IN  CHICAGO  DAIRY  DISTRICT 


493 


Evanston.  In  addition  to  the  Negro  and  foreign  districts,  Section  D 
includes  one  corner  of  a  moderately  prosperous  white  district,  but  since 
this  district  occupies  less  than  one-tenth  of  the  total  area  of  Section  D, 
it  appears  improbable  that  the  purchases  in  such  a  relatively  small  area 
could  be  sufficiently  great  to  raise  the  level  of  the  whole  district  to  the 
height  indicated.  It  seems  evident,  therefore,  that  the  Negro  population 
has  a  taste  for  cream  in  spite  of  the  apparent  lack  of  wealth  in  the  region. 
Similar  variations  in  the  sale  of  32-percent  cream  were  found,  altho 
the  price  of  "whipping"  cream1  keeps  the  sale  of  this  commodity  at 


TABLE  16. — RELATIVE  CONSUMPTION  OF  MILK  AND  CREAM  IN  CHICAGO  AND  SUBURBS 
Amount  consumed  per  100  quarts  of  milk 


Computed 
from: 

Pints 
of  milk 

Half-pints 
of  22-per- 
cent cream 

Half-pints 
of  32-per- 
cent cream 

Retail  sales  of  2  large  dealers;  3-year 
average,  1920-1922  

Table  15 
Table  14 

28.9 
28.8 

28.2 
27.6 

2.4 
2.2 

Retail  and  wholesale  sales  of  72  dealers; 
March,  1922  

Difference  

.1 

.6 

.2 

about  one-tenth  that  of  "coffee"  cream  (22-percent  fat).  The  three 
leading  sections  of  the  city  in  the  consumption  of  the  higher  testing 
cream  are,  again,  the  fashionable  and  prosperous  Section  B  and 
Evanston  and  the  Negro  and  foreign  Section  D. 

Both  Evanston  and  Section  D  show  a  decided  liking  for  pure- 
culture  ripened  skim  milk,  known  by  the  trade  as  buttermilk.  In  the 
suburb,  the  proportion  is  3.6  quarts  of  buttermilk  for  each  100  quarts  of 
milk.  The  Negro  and  foreign  populations  of  Section  D,  however,  are 
by  far  the  largest  consumers  of  buttermilk,  purchasing  8.7  quarts  for 
each  100  quarts  of  milk. 

The  foregoing  statements,  relating  to  the  consumption  of  milk  in 
various  sections  of  Chicago,  are  based  on  the  average  daily  retail  sales 
of  two  large  companies  over  a  period  of  three  years  (1920  to  1922). 
It  is  evident  from  Table  16  that  the  consumption  represented  by  these 
sales  is  representative  of  the  consumption  of  the  city  as  a  whole;  that 
is,  the  relative  amounts  of  milk  and  cream  sold  at  retail  by  the  two 
large  dealers  are  practically  the  same  as  the  relative  amounts  sold  at 
wholesale  and  retail  combined  by  the  72  dealers  included  in  Table  14. 
The  following  data  on  consumption  are  also  based  on  the  three-year 
average  sales  of  the  two  large  companies. 


JTable  B,  Appendix. 


494 


BULLETIN  No.  269 


[June, 


LONG-TIME  TREND  OF  CONSUMPTION 

Several  very  significant  changes  in  the  secular,  or  long-time,  trend 
of  consumption  are  indicated  by  the  wholesale  and  retail  sales  of  milk 
and  cream  during  the  years  covered  by  these  data.  The  annual 
increase  or  decrease  in  sales  of  each  product  is  expressed  in  Table  17 
in  percentages  of  the  three-year  average.  Since  these  data  are  based 
on  the  total  sales  of  certain  dealers,  the  increase  during  the  period  under 
study  may  have  been  due  to  one  or  more  of  the  following  factors: 
(1)  increased  per  capita  consumption;  (2)  increased  population;  or  (3) 
increased  business  for  these  particular  dealers  at  the  cost  of  customers 
for  other  dealers.  Hence,  figures  of  the  secular  trend  in  sales  are  signi- 

TABLE  17. — TREND*  IN  SALE  OF  CERTAIN  DAIRY  PRODUCTS  FOR  THE  THREE-YEAR 

PERIOD  1920  TO  1922 
Yearly  increase  expressed  in  percentages  of  average  sales  for  the  period 


Product 

Unit  of  sale 

Annual  increase  in  sales 

Retail 

Wholesale 

Milk.. 

Gallons  

perct. 

perct. 
1.1 
1.0 
12.3 
68.7 

4.3 
19.5 
3.0 
14.3 

Milk  

Quarts  

6.4 

20.1 

(:-9J 
(-.8) 

Milk  .      . 

Pints  

Milk  
Certified  milk  

Half-pints  
Quarts  

Buttermilk  

Quarts  

Cream 
1  8-percent  

Gallons  

20-,  22-,  24-,  26-,  30-  and  32-percent  .  . 
22-percent  
32-percent  

Gallons  

Half-pints  
Half-pints  

7.3 
3.7 

All  milk  

Bottled  and  bulk 
Bottled  and  bulk 
Bottled  and  bulk 

7.8° 
8.4C 
8.0C 

All  cream  

All  milk  and  creamb  

"Lines  of  secular  trend  fitted  by  method  of  least  squares. 
bln  terms  of  3.5-percent  milk. 
cRetail  and  wholesale. 

ficant  only  in  showing  relative  changes.  For  instance,  during  these  three 
years  (1920  to  1922),  the  annual  increase  in  the  sales  of  all  milk  by 
these  dealers  was  7.8  percent  of  the  average  of  the  period,  but  which  of 
the  three  factors  causing  this  increase  was  the  most  important  can  only 
be  surmised.  By  comparing  the  percentage  increases  of  the  various 
products,  however,  very  significant  changes  in  consumption  are 
apparent. 

Retail  sales  are  based  on  the  purchases  of  over  200,000  families 
and  differences  in  the  rate  of  increase  are  undoubtedly  indicative  of  the 
trends  of  consumption.  Wholesale  sales,  however,  are  based  on  pur- 
chases of  a  relatively  small  number  of  buyers,  some  of  whom  take  only 
one  grade  of  cream  or,  perhaps,  only  bulk  milk.  The  transfer  of  their 
trade  from  one  dealer  to  another  under  the  existing  competitive  condi- 


.7925] 


MARKETING  MILK  IN  CHICAGO  DAIRY  DISTRICT 


495 


tions  necessarily  affects  these  figures  in  a  way  not  possible  in  the 
case  of  the  retail  sales.  This  is  particularly  true  in  the  case  of  bulk 
milk  and  cream,  and  very  much  less  so  for  bottled  goods  because  of  the 
larger  number  of  purchasers  of  milk  in  this  form. 

The  increase  in  the  sale  of  pints  of  milk  at  retail  has  been  three 
times  as  rapid  as  the  increase  in  the  sale  of  quarts.  At  the  same  time 
the  sale  of  certified  milk  actually  decreased.  Buttermilk  also  failed  to 
hold  its  own.  Retail  sales  of  "coffee"  cream  increased  twice  as  rapidly 
as  the  sales  of  "whipping"  cream.  Of  special  interest  is  the  rapid 
growth  of  the  school  trade  in  half-pints  of  milk.  From  practically 
nothing  at  the  beginning  of  1920,  this  business  grew  to  large  proportions 
by  the  end  of  1922.  The  sale  of  pints  of  milk  at  wholesale  also  grew 
rapidly,  the  rate  of  increase  being  twelve  times  that  of  quarts  or  of 
bulk  milk. 

SEASONAL  VARIATION  IN  CONSUMPTION 

The  consumption  of  dairy  products  by  individuals  varies  consider- 
ably in  different  seasons,  and  this,  together  with  the  migration  from 
the  city  during  the  summer  vacation  months,  results  in  significant 

TABLE  18. — SEASONAL  VARIATION  IN  CONSUMPTION  OF  MILK  AND  CREAM  IN  CHICAGO 

AND  SUBURBS* 

Based  on  daily  retailb  and  wholesale  sales  of  milk  and  cream  equivalent  to  865,000 
pounds  of  3.5-percent  milk.  Average  monthly  sales  for  36  months  (1920  to  1922)  —  100 
percent. 


Month 

Bottled  and 
bulk  milk 

Bottled  and  bulk 
cream  in  terms 
of  3.5-percent 
milk 

Total  milk 
and  cream  in  terms 
of  3.5-percent 
milk 

January  

perct. 
98.2 

perct. 
100.6 

perct. 
99.0 

February  

100.2 

104.6 

101.8 

March  

101.3 

105.3 

102.7 

April  

100.1 

106.6 

102.4 

May  

99.8 

104.3 

101.4 

June  

102.1 

99.0 

101.0 

July.., 

98  4 

90.5 

95.6 

August  

96.3 

88.0 

93.4 

September  

101.2 

93.5 

98.4 

October  

103.2 

99.0 

101.8 

November  

101.1 

102.6 

101.6 

December  

98.1 

106.0 

100.9 

Average  

100.0 

100.0 

100.0 

"Corrected  for  secular  trend. 

bOf  the  total  sales  included  in  the  table,  the  proportionate  amounts  sold  at  retail  were 
as  follows:  milk,  73  percent;  cream,  56  percent;  milk  and  cream  combined,  67  percent. 


seasonal  variations  in  the  total  consumption  of  milk  in  the  city.   Table 
18  shows  the  extent  of  this  variation. 

From  January  until  June  there  is  a  somewhat  irregular  increase  in 
the  amount  of  milk  consumed.   With  the  close  of  school,  the  exodus  of 


496 


BULLETIN  No.  269 


[June, 


people  from  the  city  begins.    Sales  fall  off  rapidly,  and  the  low  point  is 
reached  in  August. 

The  public  schools  open  immediately  following  Labor  Day,  and 
a  large  proportion  of  the  vacationists  return  at  that  time.  The  others 
follow  shortly,  and  practically  all  are  back  in  the  city  by  October,  when 
the  peak  of  consumption  is  reached.  During  this  month,  7  percent  more 
milk  is  consumed  than  during  the  low  month,  August. 


Quarts  of  milk 

Pints  of  milk 

fa  pints  of  22  ptrant- crtam 

It  pints  afil  pertent  crtam 

Quarts  of  butttrmilk 


Jan.      fib.       Uar.       Apr.       May    Junt     July      dug.      S*pt      Oct.       NOK       Dtc, 


FIG.   7. — SEASONAL   VARIATION   IN   CONSUMPTION   OF   CERTAIN    DAIRY 

PRODUCTS  IN  CHICAGO  AND  SUBURBS 

Sales  of  cream  and  quarts  of  milk  decrease  in  the  summer,  when 
people  leave  the  city  for  their  vacations.  Sales  of  buttermilk  and  pints 
of  milk  increase,  because  hot  weather  stimulates  their  use  as  bever- 
ages. This  graph  is  based  on  retail  sales  to  more  than  200,000  families 
during  the  three-year  period  1920  to  1922.  (Secular  trend  not  removed. 
Average  monthly  sales  for  thirty-six  months  equal  100  percent.) 

The  advent  of  cold  weather  again  cuts  the  sales,  which  decline  for 
the  next  two  or  three  months. 

The  seasonal  variation  in  the  consumption  of  cream  is  still  greater. 
August  is  the  low  month,  while  the  heaviest  consumption  comes  during 
the  winter  and  early  spring.  A  fifth  more  cream  is  consumed  in  April 
than  in  August. 

The  combined  consumption  of  milk  and  cream  expressed  in  terms 
of  whole  milk  shows  peaks  in  the  spring  and  fall,  with  a  slight  decrease 
in  mid-winter  and  a  decided  falling  off  during  the  summer. 

A  more  detailed  analysis  of  the  seasonal  variation  in  consumption 
is  shown  by  Table  19  and  Fig.  7,  which  give  the  fluctuations  in  the 
retail  sales  of  certain  dairy  products.  During  the  months  of  May,  June, 


7925] 


MARKETING  MILK  IN  CHICAGO  DAIRY  DISTRICT 


497 


July,  August,  and  September,  the  sale  of  quarts  of  milk  is  below  the 
average  of  the  year.  The  sale  of  pints,  on  the  other  hand,  is  greatest 
during  these  months.  Greater  use  of  milk  as  a  luncheon  drink  by 
workers  and  lack  of  ice  in  many  households  explain  the  summer 
demand  for  pints,  while  the  decrease  in  the  sale  of  quarts  is  accounted 
for  by  vacations  and  week-end  trips. 

The  effect  of  this  temporarily  decreased  population  is  better 
illustrated  by  the  retail  sale  of  cream.  As  may  be  seen  from  Table  19, 
the  consumption  of  "coffee"  cream  (22  percent  fat)  falls  off  markedly 
during  July  and  August,  the  sales  during  the  latter  month  amounting 
to  only  81  percent  of  the  December  peak.  The  consumption  of  "whip- 
ping" cream  shows  a  much  greater  decrease,  the  sales  in  August 
amounting  to  only  44  percent  of  the  April  peak.  It  may  naturally  be 

« 

TABLE   19. — SEASONAL  VARIATION  IN   RETAIL  SALES   OF  CERTAIN   DAIRY  PRODUCTS* 
Average  monthly  sales  for  36  months  (1920  to  1922)  =  100  percent 


Month 

Quarts 
milk 

Pints 
milk 

Half-pints 
22-percent 
cream 

Half-pints 
32-percent 
cream 

Quarts 
buttermilk 

Quarts 
certified 
milk 

January  

pent. 
103.4 

perct. 
87.6 

perct. 
105.4 

perct. 
121.9 

perct. 
70.9 

perct. 
98.7 

February  

103.7 

89.7 

105.9 

121.9 

79.2 

102.0 

March  

103.1 

98  2 

104.4 

120.5 

87.7 

103.6 

April  

101.4 

99  3 

105  1 

127.6 

93.2 

100.6 

May  

99  5 

102  5 

102  1 

112  4 

103  1 

101.3 

June  

98  8 

110  8 

97  3 

85  3 

142  9 

99.8 

July... 

93.7 

107.3 

89.4 

59.9 

155.3 

93.7 

Aucust  

91.6 

107.3 

86.1 

56.6 

127.7 

95.1 

September  

97.5 

105.2 

93.5 

65.1 

103.5 

100.1 

October  

101.9 

103.5 

101.3 

92.1 

89.4 

102.4 

November  

102  2 

99  4 

103  3 

113  1 

76.7 

101.7 

December  

103  2 

89  2 

106  2 

123  6 

70.4 

101.0 

Average  

100.0 

100.0 

100.0 

100.0 

100.0 

100.0 

"Corrected  for  secular  trend  and  changes  in  the  relative  prices  of  pints  and  quarts. 

concluded  that  a  larger  number  of  the  people  who  buy  the  more  expen- 
sive "whipping"  cream  are  financially  able  to  spend  at  least  a  portion 
of  the  summer  away  from  Chicago. 

Buttermilk  is  a  popular  summer  drink,  over  twice  as  much  of  this 
product  being  consumed  in  July  and  August  as  is  consumed  in 
December  and  January. 

Wholesale  sales  (Table  20)  show  a  seasonal  variation  which  differs 
from  that  of  retail  sales.  The  demand  for  bulk  milk,  quarts,  and  pints, 
is  highest  during  the  summer.  Sales  of  half-pints  of  milk  correspond 
very  closely  to  the  school  year,  altho  a  certain  amount  of  office  trade 
gives  some  outlet  for  milk  in  this  form  during  the  summer  vacation. 
The  effect  of  the  Christmas  holiday  on  the  half-pint  trade  is  easily 
discernible  in  the  December  demand.  The  wholesale  sales  of  cream 
show  about  the  same  seasonal  variation  as  do  the  retail  sales,  altho 


498 


BULLETIN  No.  269 


[June, 


they   are   somewhat   more   irregular,    owing    probably   to    the   greater 
effect  of  competition. 

In  the  foregoing  discussion  of  the  seasonal  consumption  of  dairy 
products,  the  aggregate  demand  of  the  city  rather  than  individual 
demand  was  considered.  Altho  the  total  sales  of  milk  decline  in  the 
summer,  in  all  probability  the  purchases  of  people  remaining  in  the  city 
are  higher  per  person  during  this  period  than  at  any  other  time,  but 
the  data  used  here  are  not  in  a  form  to  prove  or  disprove  this  belief. 
However,  it  is  the  total  demand  of  a  city  or  of  a  district,  and  not  the 
per  capita  demand,  that  is  of  greatest  interest  to  both  producers  and 
dealers. 

TABLE  20. — SEASONAL  VARIATION  IN  WHOLESALE  SALES  OF  CERTAIN  DAIRY  PRODUCTS* 
Average  monthly  wholesale  sales  for  36  months  (1920  to  1922)  =  100  percent 


Month 

Gallons 
bulk 
milk 

Quarts 
milk 

Pints 
milk 

Half- 
pints 
milk 

Gallons 
18-perct. 
cream 

Half- 
pints 
22-perct. 
cream 

Half- 
pints 
32-perct. 
cream 

January.  .  . 

perct. 
91.3 

•perct. 
94  2 

•perct. 
84  7 

perct. 
119.2 

perct. 
93.4 

perct. 
96.6 

perct. 
108.3 

February  .  .  . 
March  

98.6 
101.8 

95.4 

95.7 

84.7 
85.4 

120.8 
136.3 

103.5 
106.7 

99.0 
98.8 

113.3 
116.6 

April  

99.7 

94.3 

89.0 

120.3 

105.8 

103.7 

128.4 

May  

98.8 

96  9 

97.7 

115.9 

98.6 

107.7 

147.4 

June  

103.6 

106  5 

117.2 

90.9 

92.2 

102.8 

109.4 

July... 

103.8 

110.7 

120.6 

28.6 

85.4 

99.3 

76.7 

August  

102.8 

107.4 

121.4 

26.0 

94.4 

100.3 

70.5 

September  .  . 
October  
November..  . 
December.  .  . 

101.1 
103.0 
100.0 
95.5 

109.7 
102.4 
94.6 
92.2 

120.8 
108.6 
92.6 

77.3 

88.6 
136.6 

132.7 
84.1 

95.2 
105.4 
108.0 
111.4 

103.0 
99.6 
94.1 
95.1 

73.6 

77.7 
85.9 
92.2 

Average.  . 

100.0 

100.0 

100.0 

100.0 

100.0 

100.0 

100.0 

"Corrected  for  secular  trend. 

VARIATION  IN  CONSUMPTION  BY  DAYS  OF  THE  WEEK 

Not  only  does  the  consumption  of  dairy  products  vary  with  the 
season,  but,  as  may  be  seen  by  Table  21  and  Fig.  8,  it  also  varies  with 
the  days  of  the  week.  In  so  far  as  the  sale  of  quarts  of  milk  is  con- 
cerned, Sunday  and  Monday  are  the  only  days  that  show  significant 
variations  from  the  normal.  On  Sunday,  many  housewives  purchase  an 
extra  quart  of  milk,  while  others  for  whom  a  pint  a  day  is  the  usual 
purchase,  buy  a  quart.  The  result  is  an  increase  of  approximately  5 
percent  in  the  sales.  Apparently,  however,  there  is  a  slight  tendency  to 
overstock,  because  on  Monday  the  sale  of  quarts  is  about  3  percent 
below  normal.1 

As  would  be  expected,  pints  of  milk  are  purchased  in  the  smallest 
numbers  on  Sunday,  altho  Saturday  also  shows  a  low  consumption. 

TTie  average  consumption  for  the  five  days,  Tuesday,  Wednesday,  Thursday, 
Friday,  and  Saturday,  has  been  arbitrarily  designated  as  normal  because  the  Sunday 
and  Monday  purchases  show  the  greatest  variation  for  most  dairy  products. 


19251 


MARKETING  MILK  IN  CHICAGO  DAIRY  DISTRICT 


499 


The  chief  reason,  of  course,  is  the  fact  that  with  the  Sunday  holiday  and 
the  Saturday  half-holiday,  fewer  people  are  lunching  away  from  home 
and  the  demand  for  milk  as  a  luncheon  drink  is  greatly  decreased.  The 
fact  that  they  are  at  home  accounts  to  some  extent  for  the  increased 
sale  of  quarts  on  Sunday. 


faroit 
300 


280 

260 

240 

220 

200 

180 

160 

140 

120 

100 

80 

60 

40 

20 


Averagt  of  Tut,  Wtdi  Thu.  FrijSat  •  100  pirctnt 


Percent 
300 


260 
240 
220 
200 
180 
160 
140 
120 
100 
80 
60 
40 
20 


FIG.   8. — VARIATION   IN   CONSUMPTION   OF  CERTAIN   DAIRY  PRODUCTS   IN 
CHICAGO  AND  SUBURBS  BY  DAYS  OF  THE  WEEK 

Saturday  and  Sunday  are  poor  days  for  the  sale  of  pints  of  milk,  but 
the  sale  of  quarts  on  Sunday  is  a  little  above  the  average.  Sunday  is  the 
big  day  for  cream,  especially  for  whipping,  but  the  housewives  tend  to 
overstock  and  on  Monday  the  sales  fall  below  normal. 

The  greatest  variation  in  the  consumption  of  dairy  products  is 
to  be  found  in  the  case  of  cream.  The  Sunday  sale  of  "coffee"  cream  is 
54  percent  above  normal,  while  the  sale  of  "whipping"  cream  on  that 
day  is  three  times  as  great  as  during  the  rest  of  the  week.  In  both 


500 


BULLETIN  No.  269 


[June, 


cases,  the  tendency  to  overstock  is  shown  by  the  subnormal  consump- 
tion of  Monday. 

The  consumption  of  cream  on  Thursday,  as  shown  in  Table  21  and 
Fig.  8,  is  slightly  exaggerated  because  of  the  large  amounts  that  are 
purchased  for  Thanksgiving  Day.  Sales  of  "coffee"  cream  on  that  day 

TABLE  21. — CONSUMPTION  OF  CERTAIN  DAIRY  PRODUCTS  IN  CHICAGO  AND  SUBURBS 

BY  DAYS  or  THE  WEEK. 

Based  on  average  retail  sales  to  more  than  200,000  families  during  the  three-year 
period  1920  to  1922.  Average  sales  for  the  five  days  Tuesday,  Wednesday,  Thursday, 
Friday,  and  Saturday  =  100  percent. 


Day  of 
week 

Quarts 

milk 

Pints 
milk 

Half-pints 
22-percent 
cream 

Half-pints 
32-percent 
cream 

Pounds 
butter 

Sunday  

pent. 
104.7 

perct. 
64.3 

perct. 
153.7 

perct. 
311.9 

perct. 
87.0 

Monday  

97.2 

100.8 

93.7 

76.4 

78.1 

Tuesday  

99  9 

104  2 

100  7 

88  1 

91.1 

Wednesday  .... 

99  3 

104  9 

99  3 

96  3 

97  6 

Thursday  

100  4 

104  4 

103  1 

107  3 

90  8 

Friday  

100.4 

105.2 

97.6 

93.0 

95.6 

Saturday  

100.0 

81.3 

99.3 

115.3 

124.9 

are  almost  double  the  regular  Thursday  sales,  while  six  times  the  usual 
amount  of  "whipping"  cream  is  required  to  supply  the  demand.  As 
three  of  the  157  Thursdays  which  are  included  in  the  three-year  period, 
1920  to  1922,  were  marked  by  the  heavy  Thanksgiving  Day  sales,  the 
average  for  Thursday  is  raised  a  small  amount.  Even  if  the  three  days 
of  abnormal  purchases  are  omitted,  however,  the  Thursday  consump- 
tion is  still  a  little  above  normal.  Other  holidays  affect  sales  of  milk  and 
cream  also. 


The  consumption  of  milk  in  Chicago  not  only  increases  as  summer 
approaches,  but  it  also  fluctuates  from  day  to  day  with  fluctuations  in 
temperature.  The  location  of  the  city  on  Lake  Michigan  makes  the 
temperature  during  the  summer  months  subject  to  abrupt  changes: 
when  the  wind  blows  from  the  lake,  it  is  usually  cool;  a  shift  to  the  west 
or  south  ordinarily  brings  warmer  weather  and  an  increased  demand 
for  milk. 

The  degree  of  correlation  between  the  daily  fluctuations  of  tem- 
perature and  the  corresponding  fluctuations  in  the  sale  of  milk  is  shown 
by  Table  22.  The  correlation  for  retail  milk  is  higher  than  for  whole- 
sale milk.  This  is  to  be  expected,  because  for  retail  milk  the  relation 
is  between  temperature  and  purchases  by  actual  consumers,  while  for 
the  wholesale  milk  the  relation  is  between  temperature  and  estimates 
by  hotel  and  restaurant  managers  of  the  amount  that  will  be  consumed. 


7925]  MARKETING  MILK  IN  CHICAGO  DAIRY  DISTRICT  501 

The  extent  to  which  temperature  affects  the  retail  sales  of  quarts 
and  pints  of  milk  and  the  wholesale  sales  of  bulk  milk  is  different  in 
each  case,  as  shown  by  Table  23.  Quarts  of  milk  are  least  affected,  since 
purchases  are  largely  for  household  use.  The  proportion  of  pints  pur- 
chased by  workers  to  drink  with  their  lunches  is  greater  than  for 

TABLE  22. — CORRELATION  COEFFICIENTS  OF  TEMPERATURE  AND  SALES  OF  MILK  FOR  THE 
SUMMER  PERIOD,  MAY  TO  OCTOBER* 


Product 

bCorrelation 
coefficient 

Probable 
error 

Quarts,  retail  

+0  523 

=t  038 

Pints,  retail  

+0  567 

=t  035 

Bulk,  wholesale  .  .  . 

+0.331 

±.046 

aBased  on  the  daily  consumption  of  over  400,000  people  during  the  summer  of  1922. 

bCorrclation  of  the  number  of  degrees  that  the  maximum  temperature  on  a  given 
day  varies  from  the  average  of  the  maximum  temperatures  of  the  previous  seven  days, 
and  the  percentage  that  the  sales  of  milk  on  the  following  day  deviate  from  the  average 
sales  of  the  previous  seven  days.  Sales  of  milk  corrected  for  secular  trend  and  for  seasonal 
and  day-of-the-week  variations. 

From  a  purely  statistical  standpoint,  a  more  desirable  correlation  is  that  of  percentage 
deviations  of  temperature  from  the  normal  and  percentage  deviations  of  sales  from  the 
expected  sales,  both  expressed  in  terms  of  standard  deviations.  On  this  basis,  the  corre- 
lation coefficient  of  temperature  and  sales  of  quarts  of  milk  is  +0.547  =±=  .026,  as  compared 
with  +0.523  =*=.038  obtained  by  the  above  method.  Altho  a  slightly  higher  degree  of 
correlation  is  thus  obtained,  the  method  of  computing  the  deviations  is  much  more  in- 
volved. Furthermore,  calculations  of  "normal"  temperatures  and  ''expected"  sales 
require  data  on  the  temperature  and  sales  for  a  period  following  the  day  on  which  the 
deviations  are  to  be  measured.  This,  of  course,  precludes  the  use  of  such  deviations  in 
predicting  sales,  since  a  milk  dealer  has  only  past  temperatures  and  past  sales  on  which 
to  base  his  prediction.  For  this  reason,  the  method  involving  deviations  from  previous 
weeks'  averages  has  been  used. 

quarts,  and  the  sale  of  pints  is  therefore  more  affected  by  temperature. 
A  large  share  of  the  bulk  milk  is  sold  to  restaurants  and  hotels,  and  as 
a  result  temperature  changes  have  a  very  marked  effect  on  the  sales. 
Altho  some  of  this  bulk  milk  was  probably  used  for  ice  cream,  the 
amount  is  relatively  small,  as  no  sales  by  jobbers  or  by  dealers  doing  a 
strictly  wholesale  business  were  included. 

The  most  striking  feature  of  the  effect  of  temperature  on  sales  is 
shown  when  a  sudden  drop  of  fifteen  or  twenty  degrees  occurs.  The 
resulting  decrease  in  consumption  is  very  much  greater  than  the 
increase  which  follows  a  sudden  rise  of  an  equal  number  of  degrees.  It 
appears  that  many  people  who  drink  milk  at  lunch  find  a  hot  drink  more 
to  their  liking  when  there  is  a  sharp  fall  in  temperature.  Since  milk  is 
very  rarely  used  as  a  hot  drink,  they  shift  to  coffee,  tea,  or  cocoa,  and 
the  demand  for  milk  is  thereby  decreased.  On  the  other  hand,  there 
are  many  iced  drinks  from  which  to  choose  if  the  coffee-  and  tea-drinkers 
prefer  a  cold  drink  when  the  temperature  climbs  suddenly.  Since  milk 
gets  only  a  part  of  this  shift  in  demand,  the  increase  in  sales  is  much 


502 


BULLETIN  No.  269 


[June, 


less  than  it  would  be  if  there  were  no  alternative  cold  drinks  from  which 
to  choose.1 

These  variations  in  demand  may  be  anticipated  to  some  extent. 
Since  most  of  the  milk  is  delivered  very  early  in  the  morning  during 
the  summer,  a  hot  or  cold  day  affects  the  next  day's  demand  rather  than 
the  sales  for  that  day.  Hence,  the  amount  of  milk  that  is  bottled  may 
be  varied  according  to  the  temperature. 

TABLE  23. — EFFECT  OF  TEMPERATURE  CHANGES  ON  SALES  OF  BOTTLED  AND  BULK  MILK 
DURING  THE  SUMMER  PERIOD,  MAY  TO  OCTOBER 


Deviation  of 
maximum  tem- 
perature on  a 
given  day  from 
average  of  maxi- 
mum tempera- 
tures of  previous 
seven  days 

Predicted  sales  for  the  following  day  in  percentage  of  average 
sales  of  previous  seven  days* 

When  temperature  increases 

When  temperature  decreases 

Quarts 
retail 

Pints 
retail 

Bulk 
wholesale 

Quarts 
retail 

Pints 
retail 

Bulk 
wholesale 

Degrees 
1  

100.1 
100.1 
100.2 
100.2 
100.3 
100.4 
100.4 
100.5 
100.5 
100.6 
100.6 
100.7 
100.8 
100.8 
100.9 
101.0 
101.1 
101.1 
101.2 
101.3 

100.1 
100.2 
100.3 
100.4 
100.5 
100.6 
100.7 
100.8 
100.8 
100.9 
101.0 
101.1 
101.2 
101.3 
101.3 
101.4 
101.5 
101.6 
101.6 
101.7 

100.4 
100.7 
101.0 
101.3 
101.6 
101.9 
102.2 
102.5 
102.8 
103.1 
103.3 
103.5 
103.7 
103.9 
104.1 
104.3 
104.5 
104.6 
104.7 
104.8 

99.9 
99.9 
99.8 
99.8 
99.7 
99.6 
99.5 
99.5 
99.4 
99.3 
99.2 
99.2 
99.1 
99.0 
98.9 
98.8 
98.7 
98.6 
98.5 
98.4 

99.9 
99.8 
99.7 
99.6 
99.4 
99.2 
99.0 
98.8 
98.6 
98.4 
98.2 
98.0 
97.8 
97.6 
97.4 
97.1 
96.8 
96.5 
96.2 
95.9 

99.6 
99.2 
98.8 
98.4 
98.0 
97.6 
97.2    * 
96.8 
96.4 
96.0 
95.5 
95.0 
94.5 
94.0 
93.5 
93.0 
92.5 
92.0 
91.5 
91.0 

2  

3  

4  

5  

6  

7  

8  

9  

10  

11  

12  

13  

14  

15  

16  

17  

18  

19  

20  

*From  curves  fitted  to  means  of  arrays  by  the  curvilinear  approximation  method. 
Ezekiel,  Mordecai:  A  method  of  handling  curvilinear  correlation  for  any  number  of 
variables.  Jour.  Amer.  Statis.  Assoc.,  19,  n.  s.  148,  December,  1924. 

By  the  use  of  these  data,  sales  for  the  ensuing  day  may  be  pre- 
dicted with  a  considerable  degree  of  certainty.  For  example,  let  it  be 
assumed  that  a  dealer  has  sold  an  average  of  30,000  quarts,  10,000 
pints,  and  1,000  gallons  of  bulk  milk  during  the  last  week  in  May.  The 
average  temperature  was  70  degrees,  but  on  Tuesday  the  temperature 


lrThis  suggests  a  somewhat  neglected  point  toward  which  advertising  to  increase 
milk  consumption  could  be  directed.  For  many  years  soft  drink  manufacturers  have 
stressed  the  refreshing  effect  of  their  beverages  when  consumed  on  a  hot  day.  It 
might  pay  to  do  the  same  with  milk. 


7925] 


MARKETING  MILK  IN  CHICAGO  DAIRY  DISTRICT 


503 


falls  to  55,  a  decrease  of  15  degrees.  From  Table  23  it  may  be  seen 
that  the  demand  for  quarts  the  next  day  will  be  98.9  percent  of  the 
previous  week's  average;  the  demand  for  pints,  97.4  percent;  and  the 
demand  for  bulk  milk,  only  93.5  percent:  or  29,670  quarts,  9,740  pints, 
and  935  gallons  of  bulk  milk.  These,  however,  are  averages  for  the 
week,  and  to  get  the  sales  for  any  particular  day  it  is  necessary  to 
multiply  these  figures  by  the  corresponding  percentage  variations  for 
the  day  of  the  week  (Table  24).  Hence,  for  the  estimation  for  Wednes- 
day's delivery  29,670  quarts  would  be  multiplied  by  99.5  percent; 
9,740  pints,  by  111.9  percent;  and  935  gallons  of  bulk,  by  106.6  percent. 
The  results,  29,522  quarts,  10,899  pints,  and  997  gallons,  would  be  the 
amounts  the  dealer  could  expect  to  sell. 

TABLE  24. — DAY-OF-THE-WEEK  CORRECTIONS  FOR  PREDICTING  SALES  OF  MILK  FROM 

TEMPERATURE  CHANGES  DURING  SUMMER  PERIOD 
Expressed  in  percentage  of  average  sales  of  previous  seven  days 


Day  of  week 

Quarts  retail 

Pints  retail, 
May  to 
October 

Bulk  wholesale, 
May  to 
October 

School 
period* 

Vacation 
period1* 

Sunday  

103.2 
97.8 
99.6 
99.5 
100.4 
100.0 
99.5 

101.6 
98.3 
100.3 
99.6 
100.5 
100.3 
99.4 

59.7 
109.7 
111.4 
111.9 
112.3 
113.0 
82.0 

80.3 
98.7 
99.4 
106.6 
107.0 
101.6 
106.4 

Monday  

Tuesday  

Wednesday  

Thursday  

Friday  

Saturday  

Average  

100.0 

100.0 

100.0 

100.0 

"From  May  1  to  close  of  public  schools  and  from  Labor  Day  to  October  31. 
bFrom  close  of  public  schools  to  Labor  Day. 

Since  the  correlation  is  not  perfect,  it  is  impossible  to  predict 
exactly  the  demand  for  milk  from  temperature  alone,  but  the  above 
tables  may  be  used  as  a  guide,  if  a  reasonable  margin  of  safety  is 
allowed.  Various  factors,  such  as  rapidly  growing  business,  vacation 
migrations,  holidays,  and  sections  of  the  city  where  the  day-of-the-week 
variations  differ,  would  introduce  errors  into  these  computations  which 
would  need  to  be  allowed  for  by  the  dealer  using  them. 

CONSUMPTION  OF  MILK  AS  AFFECTED  BY  PRICE 

The  foregoing  discussion  of  the  consumption  of  dairy  products  is 
based  on  average  figures  for  the  three-year  period  1920  to  1922.  During 
that  time,  however,  there  were  six  changes  in  the  retail  price  of  quarts 
of  milk  and  five  changes  in  the  price  of  pints.  Quarts  ranged  from  12  to 
16  cents,  and  pints  from  7  to  10  cents.  This  naturally  had  some  effect 
on  the  amount  of  milk  sold.  The  extent  to  which  these  changes  affected 
the  sale  of  milk  was  determined  as  indicated  on  page  510. 


504 


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510  BULLETIN  No.  269  [/""<?, 

Data  on  the  weekly  retail  sales  of  milk  were  corrected  for  secular 
trend  and  seasonal  variation  and  the  expected  sales  were  computed  on 
the  basis  of  these  corrected  data.  The  actual  sales  of  milk  for  three 
weeks  before  and  for  three  weeks  after  each  change  in  the  retail  price 
were  expressed  as  percentages  of  the  "expected"  sales.  Tables  25  to  30 
show  the  deviation  of  the  actual  from  the  "expected"  sales  and  the 
changes  in  consumption  that  may  be  attributed  to  changes  in  the 
retail  price. 

These  data  indicate  that: 

1.  An  increase  in  price  tends  to  cut  consumption  slightly,  while  a 
decrease  in  price  stimulates  demand  to  an  even  slighter  degree. 

2.  Sales  of  quarts  of  milk  seem  to  be  less  influenced  by  price 
changes  than  sales  of  pints. 

3.  A   change   in  the  price   of   one   unit  without   a   corresponding 
change  in  the  price  of  the  other  causes  a  shift  in  the  proportionate  sales 
of  the  two  units. 

4.  The  net  change  in  consumption,  when  both  pints  and  quarts  of 
milk   are  combined,   is   surprisingly   small   considering  the   percentage 
change  in  price  which  a  change  of  one  cent  occasions. 

The  shifting  from  quarts  to  pints  or  vice  versa,  due  to  changes  in 
the  relative  price  of  the  two  units,  is  emphasized  by  Fig.  9,  which 
shows  the  ratio  of  pints  to  quarts.  The  chart  indicates,  also,  the  danger 
of  confusing  seasonal  variation  with  changes  in  demand  due  to  price 
changes. 

It  should  perhaps  be  noted  that  the  period  under  consideration 
was  one  of  violent  price  fluctuations  for  nearly  all  commodities,  and  the 
consumption  of  milk  may  have  been  less  affected  by  price  changes  than 
it  would  have  been  in  more  stable  times.  For  this  period,  however, 
these  data  indicate  that  on  the  average  a  change  of  one  cent  a  quart 
changed  the  consumption  of  milk  less  than  one  percent,  or  occasioned 
about  the  same  change  as  results  from  a  variation  in  temperature  of 
10  degrees  from  one  summer  day  to  the  next. 


The  two  divisions  of  this  study  immediately  preceding,  dealt  with 
the  production  and  consumption  of  milk.  The  present  division  deals 
with  the  natural  resultant  of  these  two  factors  when  production  is 
greater  than  consumption;  that  is,  with  surplus  milk. 

The  term  "surplus  milk"  may  have  two  meanings.  One  dealer  may 
apply  it  to  all  milk  purchased  above  the  bottled  and  bulk  milk  require- 
ments of  his  trade.  Another  may  reserve  it  for  milk  purchased  in  excess 
of  the  amount  necessary  to  supply  his  trade  with  all  the  usual  products, 
including  cream  and  butter.  The  first  definition  is  probably  the  more 
common  and  as  a  matter  of  convenience  will  be  adopted  here.  Altho 
it  might  appear  somewhat  more  logical  to  exclude  from  surplus  milk 
that  which  is  used  to  supply  the  regular  cream  trade,  to  do  so 


1925} 


MARKETING  MILK  IN  CHICAGO  DAIRY  DISTRICT 


511 


would  complicate  an  analysis  of  the  surplus  problem,  because  many 
dealers  buy  a  part  or  all  of  their  cream  from  the  country  or  from  job- 
bers at  prices  which  are  normally  lower  than  the  cost  of  cream  sepa- 
rated from,  milk,  for  which  they  have  paid  the  regular  fluid-milk  price. 


FIG.  9. — CHANGES  IN  PROPORTIONATE  PURCHASES  OF  PINTS  AND  QUARTS 
OF  MILK  DUE  TO  CHANGES  IN  RELATIVE  PRICES  OF  THE  Two  UNITS 

The  small  circles  show  the  ratio  of  pints  to  quarts  in  different 
parts  of  the  city.  The  upper  line  shows  the  relative  price  of  pints  and 
quarts.  When  the  price  of  pints  is  high  as  compared  with  the  price  of 
quarts,  some  consumers  change  their  purchases  from  the  smaller  to  the 
larger  unit.  Note  the  relative  decrease  in  pints  in  March,  1920,  and 
in  December,  1922. 

VARIATION  IN  SURPLUS  FROM  YEAR  TO  YEAR 

In  comparing  the  price  paid  by  the  consumer  and  the  price 
received  by  the  producer,  we  are  likely  to  think  of  all  the  milk 
purchased  as  being  sold  at  the  retail  price  of  bottled  milk.  Table  31 
shows  that  this  is  far  from  true.  Data  were  obtained  from  one  company 
covering  a  period  of  seven  years  and  it  may  be  seen  that  even  during 
the  wartime  shortage  of  milk  the  total  annual  surplus  amounted  to 
28  percent  of  all  the  milk  purchased.  During  1921  and  1922  the  surplus 
handled  by  this  company  amounted  to  approximately  35  percent  of  the 
purchases.  During  the  same  years  Company  B  had  a  surplus  of  about 
30  percent.  In  other  words,  only  about  two-thirds  of  the  milk  purchased 
was  sold  as  bottled  or  bulk  milk.  The  rest  was  separated  for  cream  or 
made  up  into  other  dairy  products. 


512 


BULLETIN  No.  269 


{June, 


It  is  a  significant  fact  that  the  amount  of  surplus  milk  was  high 
during  1921  and  1922,  when  the  spread  between  the  retail  price  per 
quart  of  bottled  milk  and  the  wholesale  price  per  quart  for  all  milk 
purchased  was  greatest  (Fig.  1).  That  is,  the  greater  the  proportion 
of  milk  going  into  lower  priced  products,  the  lower  must  be  the  flat  price 
paid  for  all  milk  purchased. 

Altho  this  study  does  not  deal  with  the  cost  of  distributing  milk, 
brief  mention  may  well  be  made  of  that  problem  in  order  to  avoid  the 


TABLE  31. — YEARLY  VARIATION  IN  AMOUNT  OF  SURPLUS  MILK 

HANDLED  BY  Two  COMPANIES 
Total  amount  of  milk  purchased  each  year  =  100  percent 


Year 

COMPANY  A 

COMPANY  B 

Bottled  and 
bulk  milk 

Surplus 
milk 

Bottled  and 
bulk  milk 

Surplus 
milk 

1916.. 

perct. 
61.1 
68.3 
73.9 
66.9 
71.6 
65.3 
65.5 

perct. 
38.9 
31.7 
26.1 
33.1 
28.4 
34.7 
34.5 

perct. 

(a) 
(a) 
C) 
(a) 
78.9 
70.2 
70.5 

perct. 

(a) 
(a) 
(a) 
(a) 
21.1 
29.8 
29.5 

1917  

1918   

1919  

1920  

1921  

1922  

aData  not  available. 


inference  that  the  wide  spread  between  the  retail  price  of  milk  and  the 
wholesale  price  to  the  producer  during  1921  and  1922  was  due  entirely 
to  the  great  amount  of  surplus  handled  during  those  years.  The  cost  of 
producing  milk  has  declined  since  1920  much  more  rapidly  than  trans- 
portation, plant,  and  distribution  costs.  Low  feed  prices  during  1921 
and  1922  greatly  decreased  production  costs.  On  the  other  hand,  most 
of  the  costs  of  handling  the  milk  have  decreased  only  a  little  or  not  at 
all.  Transportation  rates  have  been  lowered  slightly;  coal  and  supplies, 
particularly  horse  feed,  have  tended  downward;  but  labor,  one  of  the 
chief  items  of  cost  in  distributing  milk,  is  still  at  the  peak.  An  example 
of  this  is  the  amount  the  retail  drivers  receive  for  delivering  a  bottle  of 
milk.1  The  milk  drivers'  union  has  obtained  for  the  drivers  a  guaran- 
teed minimum  wage  of  $45  for  a  week  of  six  days  and  in  addition  a 
commission  of  six-tenths  of  a  cent  for  each  point2  sold  above  1,333 
points  a  week. 


"December,  1924. 

*A  half-pint  of  milk  counts  as  one-half  point.  With  this  exception,  each  bottle  of 
milk,  cream,  or  buttermilk  counts  at  least  as  much  as  a  point  regardless  of  whether  it  is 
a  quart,  pint,  or  half-pint.  A  few  products  count  as  more  than  one  point.  Butter  is 
usually  handled  on  a  cash  commission  basis  of  one  cent  a  pound. 


192S~[  MARKETING  MILK  IN  CHICAGO  DAIRY  DISTRICT  513 

The  sales  per  driver  vary  widely,  but  an  estimate,  based  on  the 
records  of  58  retail  dealers  included  in  Table  14,  makes  the  average  for 
the  city  as  a  whole  about  250  points.  On  this  basis  the  average  amount 
received  by  the  drivers  would  be  approximately  3.1  cents  for  each  bottle 
of  milk,  cream,  or  buttermilk  delivered.1  This  does  not  include  the 
salaries  of  route  inspectors  nor  allow  for  the  annual  vacation  of  the 
drivers. 

Thus  the  high  plant  and  distribution  costs  have  prevented  the 
dealers  handling  margin  from  decreasing  to  any  extent.  With  the  cost 
of  producing  milk  much  lower  than  it  was  during  1918,  1919,  and  1920, 
the  inevitable  result  has  been  a  change  in  the  proportionate  amount  of 
the  consumer's  dollar  which  goes  to  the  producer.  As  was  stated  before, 
the  share  remaining  in  the  dealers'  hands  was  still  further  increased  by 
the  large  amount  of  surplus  during  1921  and  1922,  which  could  be  used 
only  for  cream  and  for  the  manufacture  of  lower  priced  products. 

RELATION  BETWEEN  SIZE  OF  BUSINESS  AND  AMOUNT  OF  SURPLUS 

The  amount  of  surplus  milk  handled  in  1922  was  very  high  for  all 
but  the  smaller  dealers.  Table  32  shows  the  relation  between  the  size 
of  business  and  the  relative  amount  of  surplus  milk  handled  during  the 
season  of  heaviest  production  and  the  season  of  shortage.  Since  the 
figures  are  based  on  the  amount  of  surplus  milk  at  two  particular 
seasons  of  the  year,  they  are  not  comparable  with  the  total  annual 
surplus  of  Company  A  or  Company  B  (Table  31). 

The  smaller  dealers  handled  relatively  less  surplus  than  the  larger 
dealers  during  both  the  season  of  heavy  production  and  the  season  of 
light  production.  Thus,  for  the  three  groups  of  dealers  handling  less 
than  20,000  pounds  of  milk  daily,  the  May  and  June  surplus  ranged 
from  21  to  30  percent  of  the  total  amount  of  milk  purchased,  while  the 
August  and  September  surplus  ranged  from  about  3  percent  to  10  per- 
cent. The  surplus  of  these  small  dealers  is  kept  at  a  minimum  during 
the  season  of  light  production  because  they  depend  largely  on  jobbers 
for  their  cream  supply  and  frequently  make  up  any  shortage  of  milk  by 
purchase  from  jobbers  or  from  the  larger  dealers.  The  May  and  June 
surplus  is  also  relatively  small,  due  to  the  fact  that  most  of  the  small 
dealers  draw  their  milk  supply  from  the  inner  district,  where  the 
seasonal  production  is  more  nearly  uniform  (Table  9). 

The  larger  dealers,  on  the  other  hand,  must  go  farther  for  a  part  of 
their  supply,  drawing  on  the  regions  where  the  seasonal  variation  in 
production  is  much  greater.  This  results  in  a  very  large  May  and  June 
surplus,  ranging  from  39  to  48  percent  of  the  total  purchases  for  the  three 
larger  groups  of  dealers.  Even  the"  August  and  September  surplus  is 

'£45 .00 +  $45.00 +  3.006  [(7)    (250)  —  1333] 

£.03 1 

7(250) 


514 


BULLETIN  No.  269 


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MARKETING  MILK  IN  CHICAGO  DAIRY  DISTRICT 


515 


relatively  large  because,  unlike  the  small  dealers,  they  cannot  depend 
wholly  on  jobbers  and  other  dealers  in  case  of  an  emergency.  It  is  one 
thing  for  a  small  dealer  to  buy  a  few  hundred  pounds  of  milk  to  fill  a 
sudden  shortage  of  5  or  10  percent  and  another  thing  for  a  large  dealer 
to  find  several  thousand  pounds  to  supply  a  similar  shortage.  This  does 
not  mean  that  the  larger  dealers  do  not  buy  milk  from  jobbers  or  from 
each  other  when  the  need  arises,  but  the  amounts  available  from  such 
sources  are,  of  course,  limited. 

SEASONAL  VARIATION  IN  AMOUNT  OF  SURPLUS 

Since  the  production  of  milk  shows  a  wide  seasonal  variation  and 
the  consumption  of  milk  shows  somewhat  less  variation,  it  is  to  be 

TABLE  33. — SEASONAL  VARIATION  IN  AVERAGE  AMOUNT  OF  SURPLUS  MILK  HANDLED 
BY  Two  COMPANIES  DURING  THE  THREE-YEAR  PERIOD  1920  TO   1922 


Month 

COMPANY  A 

COMPANY  B 

Percentage 
surplus  was 
of  total 
milk 
purchased 

Percentage 
variation  when 
average  surplus 
for  36  months 
=  100  percent8 

Percentage 
surplus  was 
of  total 
milk 
purchased 

Percentage 
variation  when 
average  surplus 
for  36  months 
=  100  percent" 

January  

33.7 
36.9 
38.7 
39.9 
45.3 
43.5 
30.9 
25.9 
18.1 
20.4 
20.4 
28.9 

104.4 
122.2 
132.6 
137.5 
170.6 
162.9 
87.2 
64.4 
40.7 
48.2 
49.9 
79.4 

17.4 
20.0 
25.9 
32.0 
42.7 
42.5 
33.3 
30.6 
23.5 
18.8 
12.8 
14.1 

64.6 
74.5 
100.7 
131.4 
198.4 
195.3 
123.0 
105.3 
77.2 
58.9 
32.7 
37.5 

February  

March  

April  

May  

June  

July... 

August  

September  '  

October  

November  

December  

Total  

32.8 

100.0 

27.3 

100.0 

8Corrected  for  secular  trend. 

expected  that  the  amount  of  surplus  will  also  vary  at  different  seasons 
of  the  year.  Naturally  this  variation  will  depend  on  the  year  and  also 
on  the  region  from  which  any  individual  dealer  may  obtain  his  supply. 
Table  33  shows  the  average  seasonal  variation  in  the  amount  of 
surplus  milk  handled  by  two  large  companies.  Company  A  had  over 
four  times  as  much  surplus  in  May  and  June  as  it  did  in  September. 
Company  B,  on  the  other  hand,  had  about  six  times  as  much  surplus 
in  May  and  June  as  it  did  in  November.  The  latter  company  obtained 
a  considerable  part  of  its  supply  from  the  Swiss-cheese  region  of  Wis- 
consin, where  spring-freshening  cows  predominate.  Altho  this  still 
further  increased  the  May  and  June  surplus,  it  tended  to  maintain 
the  supply  during  the  late  summer,  when  production-  in  the  inner  dis- 


516  BULLETIN  No.  269  [/««', 

trict  was  lowest  (page  485).  As  a  result,  this  company  had  the  least 
amount  of  surplus  during  November  and  December. 

Data  on  the  amount  of  surplus  milk  were  obtained  from  Company 
A,  by  months,  for  a  period  of  seven  years.  During  four  of  the  seven 
years  the  heaviest  surplus  came  in  June,  while  for  the  other  three  years 
May  showed  the  greatest  surplus.  September  was  the  month  of  least 
surplus  for  four  years,  while  August,  October,  and  November  each  had 
the  least  surplus  one  year. 

During  the  three  years  covered  by  the  data  obtained  from  Com- 
pany B,  May  twice  showed  the  greatest  surplus  and  June  once. 
November,  December,  and  January  each  showed  the  least  surplus  dur- 
ing one  year. 

From  the  above  it  may  be  seen  that  individual  companies  may 
have  seasonal  variations  in  the  amount  of  surplus  milk  which  do  not 
coincide  with  the  seasonal  variations  for  the  city  as  a  whole.  In  general, 
however,  dealers  expect  the  least  amount  of  surplus  in  the  late  summer 
and  early  autumn.  The  surplus  increases  gradually  until  the  cows  are 
turned  on  pasture  early  in  May.  For  two  months,  May  and  June,  the 
surplus  is  extremely  large.  In  July,  a  combination  of  factors  such  as 
hot  weather,  flies,  short  pastures,  and  advanced  lactation  for  the  fall- 
freshening  cows,  brings  a  sudden  drop  in  production  which  is  only 
partly  offset  by  the  decreased  demand  (Table  18).  The  result  is  a 
decline  in  the  amount  of  surplus  milk,  which  is  much  more  abrupt  than 
any  of  the  other  seasonal  changes.  The  further  decline  to  the  low  point 
of  the  year  is  more  gradual. 

DAILY  VARIATION  IN  AMOUNT  OF  SURPLUS 

The  reason  that  a  certain  amount  of  surplus  milk  must  be  carried 
at  all  times  by  the  dealers  becomes  apparent  from  a  study  of  the  day- 
to-day  variations.  It  was  shown  (Table  21  and  Fig.  8)  that  the  con- 
sumption of  milk  varies  with  the  days  of  the  week.  Thus,  on  Sunday 
the  demand  for  quarts  of  milk  is  about  5  percent  above  normal,  while 
for  pints  it  is  far  below  normal;  the  demand  for  pints  on  Saturday  is 
little  better.  The  school  trade  in  half-pints  is  entirely  lacking  on  both 
Saturday  and  Sunday,  and  the  sale  of  bulk  milk  also  falls.  The  result 
is  a  decided  increase  in  the  amount  of  surplus  milk  on  these  days.  For 
Company  A  (Table  34),  the  average  daily  surplus  in  1922  amounted 
approximately  to  37  percent  of  the  total  milk  purchased  for  Saturday 
and  40  percent  for  Sunday,  as  compared  with  an  average  of  approxi- 
mately 34  percent  for  the  other  days.  In  other  words,  even  had  it  been 
possible  for  this  company  to  have  eliminated  all  surplus  on  the  other 
days  of  the  week,  it  would  have  still  been  compelled  to  handle  surplus 
milk  amounting  approximately  to  4.5  percent  of  its  purchases  for  Satur- 
day and  6.9  percent  for  Sunday.  A  compensating  feature  of  this  Satur- 
day and  Sunday  surplus,  however,  lies  in  the  fact  that  it  comes  at  a 


1925] 


MARKETING  MILK  IN  CHICAGO  DAIRY  DISTRICT 


517 


very  opportune  time,  as  the  milk  can  be  separated  to  meet  the  heavy 
Sunday  demand  for  cream  (Table  21  and  Fig.  8). 

These  week-end  fluctuations  in  the  amount  of  surplus  milk  are 
shown  clearly  by  Fig.  10.    In  addition,  this  chart  shows  that  there  are 

TABLE  34. — VARIATION,  BY  DAYS  OF  WEEK,  IN  AMOUNT  OF  SURPLUS 

MILK  HANDLED  BY  COMPANY  A  IN  1922 
Average  daily  surplus  expressed  in  percentage  of  total 
amount  of  milk  purchased 


Day  of  salea 

Percentage 
surplus  was 
of  total 
purchased15 

Range  in  amount 
of  surplus  above 
Friday 
minimum 

Sunday  

39.8 

6.9 

Monday  

35.4 

2  5 

Tuesday  

33  9 

1  0 

Wednesday  

33.9 

1.0 

Thursday  

33  * 

6 

Friday  

32  9 

o 

Saturday  

37.4 

4.5 

aAs  milk  is  bottled  the  day  previous  to  its  sale,  the 
surplus  comes  upon  the  day  preceding  the  sale. 
bSimple  averages. 

sudden  violent  drops  in  the  amount  of  surplus  milk.  Thus,  the  amount 
of  surplus  on  Sunday,  June  4,  1922,  amounted  to  123.8  percent  of  the 
bottled  and  bulk  milk  sales.  On  Sunday,  June  11,  the  surplus  was  only 
97.9  percent,  a  decrease  in  one  week  amounting  to  over  one-fourth  of 
the  bottled  and  bulk  milk  sales.  Similar  abrupt  declines  in  the  amount 
of  surplus  milk  occurred  in  July,  August,  and  September.  On  several 
occasions,  a  single  day's  decrease  in  surplus,  other  than  the  regular 
daily  variation,  amounted  to  as  much  as  10  percent  of  the  fluid-milk 
sales. 

These  declines  are  due  to  increases  in  the  demand  for  milk  or  de- 
creases in  the  supply.  Frequently  both  factors  operate  at  the  same 
time.  Thus  the  drop  in  the  amount  of  surplus  milk  which  occurred  in 
the  early  part  of  June,  1922,  was  due  both  to  the  increased  demand  and 
to  the  decreased  production  resulting  from  the  unseasonable  heat,  the 
temperature  at  Chicago  reaching  a  maximum  of  90  degrees  on  June  9. 
The  late  June  decline,  on  the  other  hand,  was  due  largely  to  decreased 
production.  At  this  time  pastures  were  very  short  owing  to  dry  weather, 
only  0.65  inch  of  rain  having  fallen  in  northern  Illinois  during  June. 

The  abnormal  decreases  occurring  in  July,  August,  September,  and 
October,  1922,  were  due  largely  to  hot  weather  which  decreased  the 
production  and  at  the  same  time  stimulated  consumption.  The  big 
drop  in  the  early  part  of  September  resulted  from  the  combined  factors 
of  extremely  hot  weather  (maximum  temperature  98  degrees,  Sep- 
tember 2)  and  the  return  of  most  of  the  summer  vacationists  for  the 
opening  of  school. 


518 


BULLETIN  No.  269 


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MARKETING  MILK  IN  CHICAGO  DAIRY  DISTRICT  519 

It  is  evident  from  the  foregoing  that  a  certain  amount  of  surplus 
must  be  carried  in  order  to  guard  against  shortage  arising  from  these 
sudden  changes  in  supply  and  demand.  Individual  dealers,  particularly 
the  smaller  ones,  may  shift  the  burden  to  jobbers,  or  other  dealers,  by 
depending  on  purchases  from  these  sources  to  make  up  any  shortage. 
In  order  to  maintain  a  margin  of  safety,  however,  for  the  city  as  a 
whole,  it  appears  that  a  surplus  of  something  like  20  percent  of  the 
bottled  and  bulk-milk  requirements  should  be  carried  during  the  sum- 
mer. Had  the  margin  been  less  than  this  during  1922,  shortages 
would  have  occurred  on  a  number  of  occasions.  It  should  be  noted, 
however,  that  during  1922  the  surplus  handled  by  Company  A  fell  as 
low  as  20  percent  only  for  a  very  short  period  in  the  late  summer.  Dur- 
ing six  months  of  the  year  the  surplus  ranged  from  50  percent  to  125 
percent  of  the  bottled  and  bulk-milk  sales.  The  least  surplus  on  any  one 
day  occurred  on  September  11  and  amounted  to  9  percent  of  the  next 
day's  sales.  Even  had  the  total  year's  supply  been  sufficiently  reduced 
so  that  on  this  day  there  was  no  surplus,  the  surplus  for  the  rest  of  the 
year  would  still  have  amounted  to  41.1  percent  of  the  bottled  and  bulk- 
milk  sales,  thru  the  maladjustment  of  production  and  consumption. 

THE  UTILIZATION  OF  SURPLUS  MILK 

It  may  be  seen  from  Table  14  that  the  amount  of  milk  which  must 
be  separated  to  supply  Chicago's  daily  demand  for  cream  is  approxi- 
mately 60  percent  as  great  as  the  amount  that  is  sold  as  bottled  and 
bulk  milk.  Naturally,  any  surplus  milk  which  a  dealer  has  after  filling 
the  demand  for  bottled  and  bulk  milk  will  be  separated.  If  this  surplus 
does  not  give  sufficient  cream  to  supply  his  trade,  he  can  make  up  the 
deficit  by  contracting  for  daily  shipments  of  cream  from  one  of  the 
more  remote  parts  of  the  dairy  district,  or  by  purchases  from  jobbers 
or  other  dealers.  If  the  surplus  is  more  than  sufficient  to  supply  his 
cream  needs,  it  must  be  utilized  in  a  still  less  profitable  way.  Butter  is 
the  product  that  is  most  generally  made.  Whether  the  cream  is  sold 
as  such  or  made  into  butter,  there  remains  the  skim  milk  which  can 
be  utilized  in  various  ways. 

Table  35  shows  the  methods  of  utilizing  surplus  milk  as  reported 
by  the  dealers  included  in  Table  32.  Condensed  and  evaporated  milk 
is  ordinarily  made  from  whole  milk,  while  milk  powder  is  almost  always 
made  from  skim  milk.  American  cheese  may  be  made  from  whole  milk 
during  one  or  two  months  of  the  spring.  Some  dealers  whose  plant 
equipment  does  not  include  condensing  pans  sell  their  surplus  to 
evaporated  milk  companies  located  in  the  immediate  territory. 

Detailed  figures  on  the  utilization  of  whole  milk  were  obtained 
from  two  companies.  Tables  36  and  37  show  the  relative  amounts  of 
milk  which  were  sold  as  bulk  and  bottled  milk  or  used  for  other  dairy 
products.  During  the  season  of  heavy  production,  a  large  amount  of 
butter  is  made  from  separated  cream,  but  data  on  the  amount  used  for 


520 


BULLETIN  No.  269 


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MARKETING  MILK  IN  CHICAGO  DAIRY  DISTRICT 


521 


this  purpose  are  not  available.  Neither  was  it  possible  to  compute  the 
amount  of  shrinkage  for  Company  B,  but  as  the  loss  is  relatively 
small  no  deduction  has  been  made  from  the  amount  shown  as  having 
been  separated  for  cream. 

TABLE  36. — UTILIZATION  OF  ALL  MILK  PURCHASED  BY  COMPANY  A  DURING  THE  SEVEN- 
YEAR  PERIOD  1916  TO  1922 


Disposal 

Percentage  of  total  purchases 

1916 

1917 

1918 

1919 

1920 

1921 

1922 

Bottled  milk  

56  2 

63  0 

68.0 
5.9 
4.0 

60.2 
6.7 
1  7 
1.3 
9  0 

63.4 
8.2 

.4 
.5 

58.3 
7.0 
2.5 

3.5 

58.5 
7.0 
.3 
2.8 

Bulk  milk  

4.9 
3.1 

5.3 
8.0 

Sold  to  manufacturers  

Evaporated  milk  

Condensed  milk  

Cheese  

.7 
19.6 
.8 

26^8 

.7 

2s!o 

.7 

.2 
30.7 
.5 

Separated  for  cream  

34.4 
1.4 

23.0 

.7 

21.2 
.9 

Shrinkage  

Total  

100.0 

100.0 

100.0 

100.0 

100.0 

100.0 

100.0 

The  relative  amounts  of  milk  utilized  for  various  purposes  are 
shown  for  each  month  by  Figs.  11  and  12.  These  charts  show  also  the 
great  variation  in  the  seasonal  production  of  milk  and  the  large  propor- 
tion of  surplus  milk  which  was  handled  during  1921  and  1922. 

The  large  amount  of  skim  milk  resulting  from  separating  the  sur- 
plus handled  by  Company  A  was  utilized. as  indicated  by  Table  38  and 

TABLE  37. — UTILIZATION  OF  ALL  MILK  PURCHASED  BY  COMPANY  B 
DURING  THE  THREE-YEAR  PERIOD  1920  TO  1922 


Percentage  of  total  purchases 


uisposai 

1920 

1921 

1922 

Bottled  milk  

75.9 

68.0 

68.8 

Bulk  milk  

3.0 

2.2 

1.7 

Separated  for  cream*  

21.1 

29.8 

29.5 

Total  

100.0 

100.0 

100.0 

"Also  includes  shrinkage. 

Fig.  13.  A  limited  amount  of  skim  milk  was  taken  by  bakeries  and 
other  industries,  but  this  outlet  was  of  minor  importance.  "Buttermilk" 
(pure  culture  ripened  skim  milk)  offered  a  method  of  disposing  of  a 
certain  amount,  as  did  also  cottage  cheese.  By  far  the  greatest  propor- 
tion, however,  had  to  be  utilized  in  other  ways.  The  manufacture  of 
milk  powder  was  one  of  the  principal  methods  of  utilizing  skim  milk, 
but  because  of  the  low  price  of  this  product  during  1921  and  1922 
Company  A  arranged  for  the  sale  of  most  of  the  skim  milk  to  farmers 
for  feeding  purposes.  At  certain  times  curd  was  sold  to  casein  factories, 


522 


BULLETIN  No.  269 


{June, 


and  for  the  first  four  months  of  1920  a  small  amount  of  evaporated 
skim  milk  was  made. 


|  Shrinkage 

Condensed  ewporated '$  cheese 
Separated  for  cream 
Sold  to  other  dealers  $  mfars. 
Bulk,  city  trade 
Bottled,  city  trade 


JFHAMJJASOHO  JTMUJJ/ISOHO  JFUAUJJASOND  JFUAMJJASOHD  JFMMJJASOND  JfHAUJJASOND  , 

1916  1917  1918  1919  1920  1921 


1922 


FIG.  11. — UTILIZATION  OF  MILK  PURCHASED  BY  COMPANY  A  DURING  THE  SEVEN-YEAR 

PERIOD  1916  TO   1922 

Note  the  large  proportion  of  surplus  milk  during  1921  and  1922  and  the  wide 
variation  in  the  amount  of  surplus  in  the  different  months.  During  some  months  less 
than  half  of  the  milk  purchased  is  sold  in  fluid  form.  The  rest  is  separated  for 
cream  or  manufactured.  Drawn  to  scale,  with  the  month  of  highest  purchase  (May, 
1922)  equal  to  100. 

Some  plants  are  not  equipped  to  utilize  skim  milk  to  the  best  ad- 
vantage, so  that  occasionally  during  the  flush  season  of  production 
large  quantities  are  dumped  in  the  sewers.  This  dumping  is  more  com- 
monly practiced  by  companies  having  no  country  plants  where  the 

TABLE  38. — UTILIZATION  OF  SKIM  MILK  OBTAINED  BY  SEPARATING  SURPLUS  MILK  OF 
COMPANY  A  DURING  THE  SEVEN-YEAR  PERIOD  1916  TO  1922 


Disposal 

Percentage  of  total  amount  of  skim  milk 

1916 

1917 

1918 

1919 

1920 

1921 

1922 

Sold  in  Chicago  

33.3 
9.2 
13.9 
16.5 
13.7 
13.4 

34.8 
10.7 
2.6 
30.0 
14.8 
7.1 

32.2 
10.5 
1.3 
41.2 
6.3 
8.5 

21.3 
13.5 
.4 
52.4 
6.0 
6.4 

8.8 
11.7 
5.1 
49.0 
16.4 
3.6 
5.4 

6.0 
10.1 
54.7 
15.9 
9.5 
3.8 

4.7 
8.5 
54.2 
24.8 
7.8 

Buttermilk  

Sold  to  farmers  

Milk  powder  

Cheese  

Casein.  .  .  . 

Evaporated  milk  

Total  

100.0 

100.0 

100.0 

100.0 

100.0 

100.0 

100.0 

7925] 


MARKETING  MILK  IN  CHICAGO  DAIRY  DISTRICT 


523 


whole  milk  can  be  separated  and  the  skim  milk  returned  to  the  farmer. 
This  waste  is  usually  decried  by  newspapers  and  is  sometimes  char- 
acterized as  an  attempt  to 
destroy  a  part  of  the  supply  for 
the  purpose  of  maintaining  high 
prices.  Waste  it  undoubtedly  is, 
but  with  no  profitable  method 
of  utilizing  all  the  skim  milk  no 
other  course  is  open.  The  low 
value  of  skim  milk  as  compared 
with  the  high  cost  of  bottling  and 
distribution  makes  its  sale  on 
retail  routes  uneconomical. 

RELATION  BETWEEN  PRICES  OF 

SWEET    CREAM    AND 

WHOLE  MILK 

It  was  stated  previously 
(page  511)  that  many  small  and 
some  large  dealers  purchase  a 
part  or  all  of  their  cream  from 
jobbers  or  directly  from  the 
country.  The  advantage  of  this 
procedure  under  normal  condi- 
tions is  indicated  by  Table  39 
and  Fig.  14,  which  show  the  price 
per  gallon  for  36-percent  sweet 
cream  delivered  by  jobbers  to 
city  plants  and  the  cost  of  an 
equivalent  amount  of  3.5-percent 
milk  purchased  at  country  plants. 
In  the  case  of  the  whole-milk 
equivalent,  no  allowance  has  been 
made  for  the  cost  of  separating 
and  transporting  the  cream, 
or  for  the  value  of  the  skim  milk. 

The  comparison  is  directly  between  the  price  of  a  gallon  of  36-percent 
cream  at  the  city  plant  and  the  price  of  85.4  pounds  of  3.5-percent  milk 
(its  equivalent)  in  the  country.  Obviously  this  does  not  give  an  exact 
comparison  of  the  cost  of  cream  obtained  in  the  two  different  ways, 
but  it  does  show  the  change  in  the  relative  costs  that  took  place  during 
the  summer  of  1921. 

During  1918,  1919,  and  1920,  the  average  cost  of  a  gallon  of  36-per- 
cent cream   purchased  as  whole   milk  was  37  cents  greater  than  the 


FIG.  12. — UTILIZATION  OF  MILK  PURCHASED 
BY  COMPANY  B  DURING  THE  THREE- 
YEAR  PERIOD  1920  TO  1922 

The  surplus  during  1921  and  1922  was 
large  for  this  company  also,  but  the  winter 
surplus  was  relatively  less  than  in  the  case 
of  Company  A,  which  did  not  get  so  large 
a  proportion  of  milk  from  the  Swiss-cheese 
region.  Drawn  to  scale,  with  the  month  of 
highest  purchase  (May,  1922)  equal  to  100. 


524 


BULLETIN  No.  269 


\_June, 


- 


o    >• 

CQ      2 


«     U     O 


^^^ 

>.          to 

68      01    ,_, 

S  o    II 


£ 


s  _ 

«:    S 


£    5 


V 


&' 


OO  OO  *-H 

c-i  o)  01  cs  -H  1-1  r-i  c-i  cs  cs  «s  <M 


i  CS  01  CS  CN  CS  OJ 


CNONV-,  ro-—  i-H 


fj  •—  lO-H^- 


s 


1925] 


MARKETING  MILK  IN  CHICAGO  DAIRY  DISTRICT 


525 


jobbing  price.  For  approximately  half  the  36  months  included  in  this 
period,  the  difference  was  more  than  50  cents  a  gallon.  At  such  times, 
the  surplus  milk  separated  for  cream  made  a  relatively  expensive 
source  of  supply,  but  with  the  prevailing  system  of  buying  milk,  which 
required  the  dealers  to  take  all  the  milk  produced  by  their  regular 


FIG.   13. — UTILIZATION  OF  SKIM  MILK  OBTAINED  BY  SEPARATING  THE   SURPLUS  MILK 

NOTED  IN  FIG.  11 

Part  of  the  skim  milk  classed  under  the  different  products  was  manufactured  by 
Company  A  and  part  was  manufactured  by  other  companies  to  which  it  was  sold. 
During  1921  and  1922  a  very  large  part  of  the  skim  milk  was  sold  to  farmers  for 
feeding  purposes  because  the  price  of  milk  powder  was  too  low  for  profitable  manu- 
facture. Drawn  to  scale,  with  the  largest  amount  of  skim  milk  during  one  month 
(June,  1922)  equal  to  100. 

patrons,  no  advantage  could  be  taken  of  the  lower  jobbing  prices.  Dur- 
ing the  months  of  heaviest  production,  however,  the  price  of  cream 
purchased  as  whole  milk  was  as  low,  or  lower,  than  the  price  of  cream 
obtained  from  the  jobbers  and  little  could  have  been  gained  by  buying 
cream  from  them. 

From  September,  1921,  to  December,  1922,  sweet-cream  prices 
stood  in  an  entirely  different  relationship  to  whole-milk  prices.  During 
this  period  there  was  very  little  difference  in  the  cost  of  cream  when 
purchased  in  the  form  of  whole  milk  and  its  cost  when  purchased  from 
jobbers,  the  large  surplus  of  milk  having  depressed  the  fluid  price  to  an 
abnormally  low  level. 


526 


BULLETIN  No.  269 

THE  COURSE  OF  MILK  PRICES 


{.June, 


The  course  of  milk  prices  in  the  Chicago  dairy  district  for  the  last 
twenty  years  has  not  been  unlike  that  in  many  other  great  city  markets. 
From  1904  to  1915  the  average  annual  increase  was  4.7  cents  a  hundred 
pounds,  or  3.4  percent  of  the  average  price  for  the  period  (Table  40). 
As  is  usually  the  case,  milk  prices  lagged  behind  prices  of  other  agri- 


§325 
3.00 
275 
2.50 
225 
ZOO 

1:75 

1.50 
US 
1.00 
75 
.50 
.25 


Purchased  as  whole  milk  at  country  plants 
Pvrcfnstcf  as  crtam  -  dtliverid  to  city  plants 


1918 


1919 


JFMAUJJ4  SOHOUFHAUJJASOND  JFUAHJJAS  OND  JFM4MJJASONO  JFU4HJJ430ND 


1920 


1921 


1.50 
1.25 
1.00 
75 
.Sff 
25 


1922 


FIG.  14. — COMPARISON  OF  PRICE  OF  36-PERCENT  CREAM  DELIVERED  BY 

A  JOBBER  TO  DISTRIBUTORS'  CITY  PLANTS  AND  COST  OF  AN 

EQUIVALENT  AMOUNT  OF  CREAM  PURCHASED  AS 

WHOLE  MILK  AT  COUNTRY  PLANTS 

Before  1921,  distributors  could  buy  cream  from  jobbers  for  less 
than  they  could  buy  whole  milk  and  separate  the  cream,  but  as  a 
result  of  the  surplus  production  during  1921  and  1922  there  was  very 
little  difference  in  cost  in  those  years  (85.4  pounds  of  3.5-percent 
milk  =  1  gallon  of  36-percent  cream). 

cultural  products  and  as  a  result  the  producers  withheld  their  milk  in 
April,  1916,  until  their  demands  for  increased  prices  were  met.  The 
increase  in  price  during  the  period  September,  1915,  to  September,  1917, 
was  fairly  rapid  (14.4  percent  of  the  average),  but  not  so  great  as  that 
of  feeds  or  grains.  Consequently,  the  producers  demanded  and  obtained 
a  very  large  increase  for  October,  1917.  This  was  followed  by  a  period 
of  high  prices  marked  by  indictments,  the  appointment  of  milk  commis- 
sions, milk  strikes,  price  fixing,  and  the  formation  of  the  Milk  Producers 
Cooperative  Marketing  Company. 


MARKETING  MILK  IN  CHICAGO  DAIRY  DISTRICT 


527 


Prices  broke  in  November,  1920,  and  in  one  year  dropped  to  about 
half  the  previous  level.  This  statement  refers  to  the  prices  paid  by 
dealers.  Most  of  the  milk  was  sold  thru  the  marketing  organization 
during  1919,  1920,  and  1921,  and  after  the  administrative  expenses  and 
the  loss  on  surplus  were  deducted,  the  producers  received  prices  ranging 
from  50  to  99  percent  of  the  prices  paid  by  the  dealers.1  From  Novem- 
ber, 1921,  to  September,  1924,  prices  increased  rapidly,  and  for  the  last 
year  of  the  period  averaged  about  75  percent  above  the  pre-war  level. 

TABLE  40. — TREND  IN  PRICES  PAID  BY  DEALERS  FOR  3.5-PERCENT  MILK  AT  COUNTRY 

PLANTS  IN  CHICAGO  DAIRY  DISTRICT* 
Yearly  changes  in  price  expressed  in  percentage  of  average  price  for  period 


Period 

Number  of 
years 

Average  annual 
change  in  price 

January,  1904-August,  1915  

11.7 
2.1 
3.1 
1.0 
2.9 

cents 
+4.7 
+26.7 
+  16.7 
-113.5 
+37.3 

perct. 
+3.4 
+14.4 
+5.3 
-50.2 
+  16.5 

September,  1915-September,  1917  

October,  1917-October,  1920  

November,  1920-October,  1921  

November,  1921-September,  1924  

"Method  of  least  squares. 

ALTERNATIVE  MARKETS  FOR  MILK 

With  the  great  surplus-milk  region  to  the  north  of  the  Chicago 
dairy  district,  and  with  the  slight  cost  necessary  to  divert  this  milk  to 
the  city  market,  the  relative  prices  of  milk  used  for  various  purposes 
are  highly  significant  to  the  dairymen  now  supplying  that  market.  If 
the  Chicago  price  is  maintained  at  an  artificially  high  level,  the  Wiscon- 
sin farmers  now  selling  to  creameries,  cheese  factories,  or  condenseries 
will  grasp  the  opportunity  to  share  the  advantages  thus  offered.  If,  on 
the  other  hand,  the  Chicago  milk  prices  fall  too  low  in  relation  to  the 
prices  offered  for  milk  for  other  purposes,  many  dairymen  in  the  dis- 
trict are  so  situated  that  one  or  more  alternative  markets  are  available. 
Tables  41  to  44  show  the  prices  paid  in  these  various  markets  during 
the  ten-year  period  1913  to  1922. 

Condensery  Market. — From  1913  to  the  middle  of  1920,  condensery 
prices,  both  in  the  inner  and  outer  districts,  averaged  approximately  the 
same  as  the  Chicago  fluid-milk  price,  but  with  the  breakdown  of  export 
demand  and  the  accumulation  of  unsold  stocks,  sharp  price  cuts  were 
made.  For  1920,  1921,  and  1922  condensery  prices  were  approximately 
10  percent  below  the  city  price. 

The  seasonal  variation  in  the  price  paid  by  near-by  condenseries 
is  very  similar  to  that  of  the  city  fluid-milk  price.  The  plants  located 
just  outside  the  Chicago  district,  however,  pay  prices  which  tend  to  be 
relatively  higher  in  summer  and  lower  in  winter. 


A,  Appendix. 


528 


BULLETIN  No.  269 


[June, 


Foreign-Type  Cheese  Factories. — During  this  ten-year  period  milk 
for  the  manufacture  of  foreign-type  cheese  brought  a  little  over  80 

TABLE  41. — AVERAGE  PRICES  OF  3.5-PERCENT  MILK  AT  COUNTRY  PLANTS  IN  THE 
CHICAGO  TERRITORY 


Year 

Fluid 
milk 
for 
Chicago 
market 

Av.  of  6 
conden- 
series  in 
Chicago 
district 

Av.  of  9 
conden- 
series 
outside 
Chicago 
district 

Av.  of  3 
foreign- 
type 
cheese 
factories 

Av.  of  3 

American 
cheese 
fac- 
tories 

bValue  of 
butter-fat 
and 
skim 
milk 

1913.. 

$1.57 

$1  57 

$1  59 

$1.31" 

$  

$1.30 

1914     . 

1  60 

1  58 

1  57 

1   12a 

1.23 

1915 

1  58 

1  55 

1  48 

1  25a 

1  21 

1916  

1.72 

1.72 

1.71 

1.75a 

1.60 

1.43 

1917  

2.37 

2.43 

2.44 

2.20" 

2  08 

1.90 

1918   

2.87 

2.87 

2.88 

2.50 

2  37 

2  32 

1919  

3.25 

3.25 

3.27 

2.61 

2.62 

2.66 

1920  

3.17 

2.94 

2.84 

2.17 

2.22 

2.64 

1921  

2.09 

1.87 

1.74 

1.57 

1.55 

1.71 

1922  

1.87 

1.69 

1.67 

1.58 

1.66 

1.65 

10-year 
average  .  . 

$2.21 

$2.15 

$2.12 

$1.81 

$1.81 

Acknowledgment  is  due  Mr.  V.  R.  Wertz,  Assistant  Professor  of  Agricultural  Econom- 
ics at  the  State  Agricultural  College  of  South  Dakota,  for  his  courtesy  in  furnishing  the 
cheese  factory  prices  and  part  of  the  condensery  prices. 

See  Tables  A,  G,  H,  I,  J,  and  K,  Appendix,  for  monthly  prices. 

"Nine-month  average,  April  to  December. 

bButterfat  prices  are  for  sour  cream  delivered  at  Chicago,  and  skim  milk  is  based  on 
the  wholesale  price  of  tankage  (10  pounds  of  skim  milk  =  1  pound  of  tankage). 

TABLE  42. — COMPARISON  OF  PRICES  PAID  PRODUCERS  FOR  MILK  USED  IN  VARIOUS  WAYS 
IN  THE  CHICAGO  TERRITORY 


Percentage  of  Chicago  fluid-milk  price 


Year 

Chicago 
fluid- 
milk 
market 

Conden- 
series  in 
Chicago 
district 

Conden- 
series 
outside 
Chicago 
district 

Foreign- 
type 
cheese 
fac- 
tories 

American 
cheese 
fac- 
tories 

Value   of 
butterfat 
and 
skim  milk 

1913.. 

100.0 

100.0 

101.3 

85.  6a 

82.8 

1914  

100.0 

98.8 

98.1 

72.  7a 

76.9 

1915  

100.0 

98.1 

93.7 

81.7" 

76.6 

1916  

100.0 

100.0 

99.4 

97.7" 

'93'6 

83.1 

1917  

100.0 

102.5 

103.0 

87.  6a 

87.8 

80.2 

1918  

100.0 

100.0 

100.3 

87.1 

82.6 

80.8 

1919  

100.0 

100.0 

100.6 

80.3 

80.6 

81.8 

1920  

100.0 

92.7 

89.6 

68.5 

70.0 

83.2 

1921  

100.0 

89.5 

83.3 

75.1 

74.2 

81.8 

1922  

100.0 

90.4 

89.3 

84.5 

88.8 

88.2 

10-year 

average  .  . 

100.0 

97.3 

95.9 

81.9 

81.  5b 

81.9 

aNme-month  average,  April  to  December,  for  both  fluid-milk  and  cheese-factory 
prices;  12-month  average  for  other  years. 
bSeven-year  average,  1916  to  1922. 


1925} 


MARKETING  MILK  IN  CHICAGO  DAIRY  DISTRICT 


529 


percent  of  the  Chicago  price.   The  different  years  show  wide  variations, 
ranging  from  97.7  percent  in  1916  to  68.5  percent  in  1920. 

This  market  is  not  ordinarily  a  year-round  market,  because  of  the 
difficulty  of  making  good  foreign-type  cheese  in  the  winter.    Milk  of 


TABLE  43. — AVERAGE  MONTHLY  PRICES  OF  3.5-PERCENT  MILK.  AT  COUNTRY  PLANTS  IN 
THE  CHICAGO  TERRITORY  FOR  THE  TEN-YEAR  PERIOD  1913  TO  1922 


Month 

Fluid 
milk 
for 
Chicago 
market 

Av.  of  6 
conden- 
series  in 
Chicago 
district 

Av.  of  9 
conden- 
series 
outside 
Chicago 
district 

Av.  of  3 
foreign- 
type 
cheese 
factories 

8Av.  of  3 
American 
cheese 
factories 

bValue  of 
butterfat 
and 
skim  milk 

January.  . 
February. 
March  .  .  . 
April  

$2.43 
2.29 
2.13 
2.08 

$2.37 
2.25 
2.09 
2.02 

$2.33 
2.21 
2.09 
2.02 

$.... 
L46 

$2.26 
2.03 
1.89 
1.66 

$1.85 
1.78 
1.84 
1  82 

May  

1.82 

1  79 

1.84 

1.67 

1.68 

1  66 

June  

1.69 

1.65 

1.72 

1.65 

1.65 

1.62 

July  .  . 

2.05 

1.96 

1.93 

1.71 

1.72 

1  66 

August.  .  . 
September 
October  .  . 
November 
December 

2.29 
2.23 
2.51 
2.52 
2.49 

2.19 

2.22 
2.38 
2.42 
2.46 

2.11 

2.17 
•       2.27 
2.36 
2.38 

1.81 
2.06 
2.07 
2.14 
2.05 

1.82 
2.11 

2.35 
2.53 
2.48 

1.69 
1.82 
1.91 
1.99 
2.03 

Average.  . 

$2.21 

$2.15 

$2.12 

$1.81 

*Seven-year  average,  1916  to  1922. 

bButterfat  prices  are  for  sour  cream  delivered  at  Chicago  and  skim  milk  is  based  on 
the  wholesale  price  of  tankage  (10  pounds  of  skim  milk  =  1  pound  of  tankage). 

TABLE  44. — COMPARISON  OF  AVERAGE  MONTHLY  PRICES  PAID  PRODUCERS  FOR  MILK 
USED  IN  VARIOUS  WAYS  IN  THE  CHICAGO  TERRITORY  FOR  THE  TEN- YEAR  PERIOD 

1913  TO  1922 


Percentage  of  Chicago  fluid-milk  price 


Month 

Chicago 
fluid- 
milk 
market 

Conden- 
series  in 
Chicago 
district 

Conden- 
series 
outside 
Chicago 
district 

Foreign- 
type 
cheese 
factories 

aAmerican 
cheese 
factories 

Value  of 
butterfat 
and 
skim  milk 

January.  . 
February. 
March  .  .  . 
April  

100.0 
100.0 
100.0 
100.0 

97.5 
98.3 
98.1 
97.1 

95.9 
96.5 
98.1 
97.1 

'7o!i 

84.3 
80.2 
80.8 
71.2 

76.1 
77.7 
86.4 
87.5 

May  
June  
July  
August.  .  . 
September 
October  .  . 
November 
December 

100.0 
100.0 
100.0 
100.0 
100.0 
100.0 
100.0 
100.0 

98.4 
97.6 
95.6 
95.6 
99.6 
94.8 
96.0 
98.8 

101.1 
101.8 
94.1 
92.1 
97.3 
90.4 
93.7 
95.6 

91.8 
97.6 
83.4 
79.0 
92.4 
82.5 
84.9 
82.3 

81.6 
85.1 
73.2 
69.5 
83.7 
83.3 
90.7 
90.2 

91.2 
95.9 
81.0 
73.8 
81.6 
76.1 
79.0 
81.5 

Average.  . 

100.0 

97.3 

95.9 

84.  5b 

81.5 

81.9 

"Seven-year  average,  1916  to  1922. 
bNine-month  average,  April  to  December. 


530 


BULLETIN  No.  269 


{June, 


exceptionally  high  quality  from  grass-fed,  spring-freshening  cows  is 
necessary  for  the  best  results.  Many  factories  require  their  patrons  to 
deliver  the  milk  twice  daily  during  the  spring  and  summer.  In  winter 
many  factories  close  while  others  manufacture  American-type  cheese. 


1907  1908  1909  1910  1911    1912  19/3  1914  1915  1916  19/7  1918  1919  1920  1921  1922  1923 


FIG.  15. — COMPARISON  OF  PRICE  OF  WHOLE  MILK  AT  COUNTRY  STATIONS  AND 

VALUE  OF  AN  EQUIVALENT  AMOUNT  OF  WHOLE  MILK  IN  TERMS 

OF  BUTTERFAT  AND  SKIM  MlLK 

Butterfat  prices  are  for  sour  cream  delivered  at  Chicago  and  skim  milk  is 
based  on  the  wholesale  price  of  tankage  (10  pounds  of  skim  milk  =  1  pound  of 
tankage).  Since  butter  can  be  easily  stored  and  milk  cannot,  the  winter  price  for 
fat  is  relatively  lower  than  the  price  for  fluid  milk.  During  the  spring  the  large 
amount  of  milk  produced  forces  the  fluid-milk  price  to  approximately  the  butter- 
fat  and  skim-milk  level.  (See  Tables  A  and  K,  Appendix,  for  monthly  values.) 


The  foreign-type  cheese  region  offers  a  good  field  for  the  extension 
of  the  Chicago  dairy  district,  if  the  late  summer  shortage  is  to  be  met 
by  bringing  in  milk  from  outside  the  territory  rather  than  by  changing 
the  seasonal  production  of  the  inner  district. 

American  Cheese  Factories. — Price  data  were  available  for  seven 
years  only  on  these  plants.  During  that  time,  the  prices  paid  for  milk 
were  approximately  the  same  as  those  paid  by  the  foreign-type  cheese 
factories.  In  the  past,  many  American  cheese  factories  closed  in  the 
winter,  but  the  increase  in  the  number  of  silos  has  caused  a  shift  in  the 
season  of  production.  Relatively  more  cheese  is  now  produced  during 
the  winter  than  formerly  even  with  the  higher  cost  of  barn  feeding. 


19251 


MARKETING  MILK  IN  CHICAGO  DAIRY  DISTRICT 


531 


Butterfat  Market. — Practically  every  farmer  in  the  Chicago  dis- 
trict and  in  the  contiguous  territory  has  a  butterfat  market  for  his 
cream.  This  may  be  a  local  cooperative  or  proprietary  creamery,  a 
centralizer  cream  station,  or,  at  least,  a  railway  station  from  which  he 


FIG.  16. — COMPARISON  OF  WHOLE  MILK  AND  BUTTERFAT  PRICES  FOR  TEN  YEARS,  1914 

TO   1923,  BY  USE  OF  INDEX  NUMBERS 

• 

The  Chicago  fluid-milk  price  is  greatly  affected  by  butter  prices  because  of  the 
great  surplus-milk  producing  region  adjoining  the  district.  Altho  minor  fluctuations  and 
seasonal  variations  may  be  unlike,  the  long-time  trends  of  both  butter  and  fluid-milk 
prices  are  very  similar.  (See  Tables  C  and  L,  Appendix,  for  monthly  index  numbers.) 

can  send  his  cream  to  a  direct-shipment  centralizer.  Frequently  all 
these  markets  are  available. 

The  prices  received  are  normally  lower  than  for  milk  in  other 
forms.  To  offset  this  disadvantage,  the  producer  has  the  skim  milk  for 
feeding  young  stock,  hogs,  and  poultry,  he  is  not  required  to  make  as 
frequent  deliveries,  and  he  has  less  work  and  expense  than  if  he  were 
producing  milk  under  city  health  regulations. 

After  an  allowance  for  the  feeding  value  of  skim  milk  is  ad^ed  to 
the  butterfat  price,  the  butterfat  market  is  seen  to  have  paid  slightly 
over  80  percent  of  the  Chicago  milk  price  during  the  ten-year  period 
under  consideration.  The  range  was  from  76.6  percent  to  88.2  percent. 
The  relatively  high  price  for  fat  occurred  in  1922,  when  fluid-milk  prices 
were  at  an  abnormally  low  level. 

The  winter  prices  for  butterfat  are  relatively  much  lower  than  the 
summer  prices.  In  other  words,  the  fluid-milk  price  falls  almost  to  the 


532  BULLETIN  No.  269  [June, 

butterfat  and  skim-milk  value  .during  the  season  of  heaviest  production. 
This  is  illustrated  by  Fig.  15,  which  shows  the  value  of  100  pounds  of 
milk  on  the  two  markets  from  1907  to  1923. 

The  chart  indicates,  also,  that  fluid-milk  prices  in  the  Chicago 
district  are  closely  linked  with  butterfat  prices.  This  is  illustrated  better 
by  Fig.  16,  which  shows  index  numbers  of  the  two  prices.  Minor  fluc- 
tuations and  seasonal  variations  may  be  unlike,  but  the  long-time 
trends  are  very  similar.  From  the  standpoint  of  alternative  markets, 
this  is  to  be  expected,  particularly  when  it  is  remembered  that  the  great 
surplus  region  of  Wisconsin  borders  the  Chicago  district. 

PRICE  DETERMINATION 

No  matter  what  plan  of  price  determination  is  used  in  the  Chicago 
district,  it  seems  obvious  that  the  city  fluid-milk  price  must  always  be 
considered  in  relation  to  the  prices  of  other  dairy  products  for  three 
reasons : 

1.  During  certain   seasons   a   very   large   proportion   of  the   milk 
purchased  for  the  city  market  must  be  utilized  for  other  dairy  products. 

2.  The   city   market   is   normally   the   most  desirable.    Dairymen 
selling  to  the  lower-paying  markets  are  always  glad,  therefore,  to  divert 
their  milk  to  the  city  if  prices  are  sufficient  to  overcome  the  obstacles  of 
distance  and  to  pay  for  the  extra  work  entailed. 

3.  Conversely,  unless  the  city  fluid-milk  price  is  high  enough  to 
pay  for  the  additional  care  which  is  necessary,  dairymen  will  shift  to 
one  of  the  markets  with  less-exacting  requirements. 

The  writer  offers  no  "rule  of  thumb"  method  of  price-making,  but 
suggests  consideration  of  the  following  factors  in  arriving  at  prices: 

1.  Amount  of  Surplus  Milk. — If  the  fluid-milk  trade  utilizes  most  of 
the  supply  or,  as  it  is  commonly  expressed,  "cleans  up  the  market,"  an 
increase  in  price  may  be  justified.    If,  however,  the  surplus  is  accum- 
ulating, an  increase  in  price  usually  results  in  serious  difficulties  which 
a  constant  or  decreased  price  would  have  prevented. 

2.  Prices  of  Other  Dairy  Products. — Because  of  the  great  sur- 
plus-producing  region   adjoining  the   Chicago   dairy   district,   the   im- 
portance of  this  factor  in  determining  the  price  of  milk  cannot  be  too 
strongly  emphasized.  It  has  been  discussed  fully  in  the  preceding  pages. 

3.  Cost  of  Feed  and  Labor. — Since  feed  .and  labor  make  up  the 
greater  part  of  the  cost  of  producing  milk,  changes  in  the  cost  of  these 
two  items  should  be  carefully  noted  because  of  their  influence  on  the 
probable  supply  of  milk.    Failure  to  do  this  in  1916,  1917,  and  1918 
resulted  in  a  shortage  of  milk.    Conversely,  declining  feed  and  labor 
costs,  without  an  equivalent  decrease  in  price,  result  in  over-production. 

4.  Pasture   Conditions. — Climatic    conditions    which   cause   either 
abundant  or  short  pasturage  may  necessitate  temporary  price  adjust- 
ments during  the  summer. 


1925~\  MARKETING  MILK  IN  CHICAGO  DAIRY  DISTRICT  533 

5.  Trend  in  the  Production  of  Milk  per  Farm. — The  average  pro- 
duction  of   milk   per   farm   as   shown   by   dealers'    monthly   purchase 
records,  is  a  good  indication  whether  'producers  consider  prices  equi- 
table. When  prices  are  favorable,  production  increases;  when  prices  are 
low,  production  falls.    Full  advantage  cannot  be  taken  of  this  factor, 
however,  because  of  the  natural  lag  in  farm  practice.   When  prices  are 
too  high,  production  responds  more  quickly  than  when  they  are  too  low, 
because  dairymen  tend  to  buy  additional  cows  more  readily  than  they 
tend  to  sell  a  part  of  the  herd.  Abnormal  pasture  conditions  may  also 
cause  variations  in  the  production  per  farm  and  thus  affect  the  accur- 
acy of  this  measure. 

6.  Trend  of  Consumption. — Changes  in  consumption  indicate  to 
some  extent  the  consumers'  views  as   to  the  equitableness   of  retail 
milk  prices.   The  value  of  this  factor  is  lessened,  however,  because  of 
the  inelasticity  of  demand,  altho  milk  prices  that  are  too  high  are  likely 
to  cause  a  significant  decline  in  consumption. 

7.  Relative  Profitableness  of  Other  Farm  Enterprises. — Since  other 
livestock  enterprises   and  crops  compete  with  dairying  for  land  and 
labor,  any  great  differences  in  the  profits  of  the  various  enterprises  will 
cause  shifts  from  one  to  the  other,  thus  affecting  the  supply  of  milk. 
Such  changes,  however,  usually  require  considerable  time  in  which  to 
operate  and  are  valuable  only  as  a  long-time  guide  to  prices. 

8.  Trend   in   the   Raising   of    Young   Stock. — Another    long-time 
measure  of  the  proper  adjustment  of  milk  prices  is  the  tendency  of 
dairymen  to  increase  or  decrease  the  raising  of  heifer  calves  in  response 
to  profitable  or  unprofitable  conditions.   A  permanent  change  in  farm 
practice,  however,  should  not  be  confused  with  maladjustment  of  price. 
Such  a  change  is  illustrated  by  the  growing  tendency  of  dairymen  in  the 
most  intensive  districts  to  maintain  their  herds  by  purchase  rather  than 
by  raising  young  stock. 

Careful  attention  to  the  above  factors  in  price  determination  and 
good  judgment  in  their  application  would  do  much  to  stabilize  dairying 
in  the  Chicago  district,  by  avoiding  price  maladjustments  and  the 
resulting  periods  of  over-  and  underproduction. 

CONCLUSIONS 

The  greater  part  of  Chicago's  milk  supply  comes  from  regions  in 
northern  Illinois  and  southern  Wisconsin,  where  a  large  proportion  of 
the  land  is  tillable.  Crop-growing  competes  with  dairying  for  labor  and 
this,  together  with  the  relatively  high  winter  prices  for  milk  which  pre- 
vailed until  1919,  has  resulted  in  the  overdevelopment  of  winter  dairy- 
ing, while  not  enough  milk  is  produced  in  late  summer  and  early  fall. 

Since  1919  summer  prices  have  been  maintained  at  relatively 
higher  levels  in  an  effort  to  stimulate  production  during  the  summer, 


534  BULLETIN  No.  269 

but  with  practically  no  effect  on  seasonal  production  in  the  inner  part  of 
the  district.  It  appears  quite  probable  that  before  these  high  summer 
prices  have  changed  the  seasonal  production  to  any  extent,  large 
amounts  of  milk  will  be  attracted  to  the  city  market  from  the  summer 
dairying  regions  of  Wisconsin.  Perhaps,  in  the  long  run,  the  most 
economical  method  of  obtaining  a  relatively  uniform  supply  thruout  the 
year  will  be  to  pay  winter  prices  that  are  high  enough  to  encourage 
winter  dairying  in  the  inner  district,  where  crop-growing  is  a  major 
enterprise,  and  to  supplement  the  low  summer  production  by  bringing 
in  milk  from  the  surplus-producing  regions  of  Wisconsin,  where  a 
smaller  proportion  of  the  land  is  tillable. 

The  demand  for  dairy  products  varies  with  the  season,  the  day  of 
the  week,  and  the  temperature.  These  variations  are  fairly  definite  and 
can  therefore  be  predicted.  Nevertheless,  these  whims  of  consumption 
tend  to  increase  the  cost  of  handling  milk  and  the  price  the  consumer 
pays  must  necessarily  cover  this  cost.  Altho  changes  in  the  retail  prices 
of  pints  and  quarts  of  milk  cause  consumers  to  shift  from  one  unit  to 
the  other  and  to  increase  or  decrease  the  demand,  the  net  change 
in  consumption  is  very  small,  indicating  that  there  is  very  little  elasti- 
city in  the  demand  for  milk. 

During  the  period  considered  in  this  study,  the  amount  of  surplus 
milk  has  been  rapidly  increasing.  The  large  dealers  have  been  bearing 
a  greater  part  of  the  surplus  burden  than  the  small  dealers.  Since  the 
former  group  constitutes  the  more  important  element  in  the  demand  side 
in  bargaining  with  the  producers,  this  surplus  has  a  very  great  influence 
on  milk  prices.  It  is  especially  unfortunate  that  a  large  amount  of 
surplus  milk  comes  in  the  winter,  when  production  costs  are  high.  There 
is  a  certain  amount  of  surplus  that  must  be  carried  at  all  times  because 
of  the  variability  of  supply  and  demand,  but  this  necessary  surplus 
is  a  cost  of  the  business  and  should  not  unduly  influence  prices. 

Altho  the  producers  in  the  present  Chicago  dairy  district  will,  in 
all  probability,  hold  their  own  in  competition  with  the  great  surplus- 
producing  region  to  the  north,  they  will  meet  with  serious  difficulties  in 
keeping  their  market  unless  they  take  this  available  supply  into  con- 
sideration in  bargaining  with  the  dealers.  In  spite  of  the  often  ex- 
pressed wish  of  the  Chicago  producers  to  "build  a  wall  around  the  Chi- 
cago dairy  district,"  the  dairymen  in  the  surplus-producing  regions  will 
always  be  potential  competitors.  Because  of  this  fact,  a  city  fluid-milk 
price  that  is  out  of  line  with  prices  of  other  dairy  products  cannot  be 
maintained  for  any  length  of  time.  Hence,  if  producers  in  the  Chicago 
district  are  to  further  their  own  interests,  they  must  use  care  not  to  force 
fluid-milk  prices  to  a  point  where  dairymen  in  the  surplus  region  will 
be  induced  to  seek  the  Chicago  market. 


APPENDIX 


536 


BULLETIN  No.  269 


[June, 


TABLE  A. — AVERAGE  PRICE  PAID  BY  DEALERS  FOR  MILK  AT  COUNTRY  PLANTS  IN  THE 

CHICAGO  DAIRY  DISTRICT* 
Per  100  pounds  of  3.5-percent  milk 


Year 

Jan. 

Feb. 

Mch. 

•Apr. 

May 

June 

July 

Aug. 

Sept. 

Oct. 

Nov. 

Dec. 

Aver. 

1907... 
1908  

$1.55 
1  65 

$1.45 
1.65 

31.35 
1.55 

$1.30 
1.35 

21.00 
1.05 

$  .90 
.95 

$1.00 
1.05 

$1.20 
1.25 

$1.30 
1.35 

$1.55 
1.45 

$1.65 
1.55 

$1.65 
1.55 

$1.33 
1.37 

1909     .  . 

1  55 

1  55 

1  45 

1  40 

1  10 

.95 

1  05 

1  25 

1  35 

1  55 

1  70 

1  75 

1  39 

1910  

1  75 

1  70 

55 

1  45 

1  20 

1  05 

1.20 

1.30 

1.40 

1.70 

1.90 

2.00 

1  52 

1911  

2  00 

1.90 

.70 

1.30 

1.10 

1.00 

1.30 

1.45 

1.45 

.70 

1.85 

1.90 

1.55 

1912  

1.85 

1.80 

.65 

1.30 

1.05 

1.00 

1.30 

1.45 

1.50 

.60 

1.75 

1.80 

1.50 

1913     

1  75 

1  70 

60 

1  50 

1  25 

1  15 

1.35 

1.50 

1.55 

.75 

1.85 

1.90 

1  57 

1914  
191S  

1.90 
1.85 

1.75 
1.75 

.65 
.65 

1.50 
1.45 

1.25 
1.20 

1.10 
1.10 

1.35 
1.30 

1.55 
1.55 

1.55 
1.55 

.80 
.80 

1.90 
1.90 

1.90 
1.90 

1.60 

1.58 

1916.    .. 

1  85 

1  75 

65 

1  65 

1  45 

1  25 

1  55 

1  70 

1  70 

.90 

2  10 

2.10 

1  72 

1917  

2  05 

2  00 

85 

2  40 

2  00 

1  60 

2.12 

2.30 

2.30 

3.42 

3.22 

3.22 

2.37 

1918  
1919     .  . 

3.22 
3  76 

3.07 
3  50 

2.90 
3  00 

2.65 
2  80 

2.05 
2  50 

1.80 
2  50 

2.30 
3  00 

2.75 
3  52 

2.92 
3  55 

3.32 
3.63 

3.68 
3.60 

3.77 
3.65 

2.87 
3  25 

1920  

3  60 

3  35 

2  90 

2  75 

2  70 

2  75 

3.20 

3.70 

3.70 

3.70 

3.05 

2.60 

3.17 

1921  
1922  

2.50 
1.80 

2.35 
1.70 

2.35 
1.70 

2.35 
1.70 

2.05 
1.70 

2.05 
1.60 

2.30 
2.00 

2.30 
2.05 

1.50 
2.00 

1.75 
2.05 

1.80 
2.05 

1.80 
2.10 

2.09 
1.87 

1923  
1924  

2.50 
2.675 

2.50 
2.675 

2.40 
2.675 

2.40 
2.50 

2.30 
2.30 

2.25 
2.30 

2.75 
2.50 

2.75 
2.60 

2.75 
2.60 

2.75 
2.40 

2.75 
2.40 

2.75 
2.40 

2.57 
2.50 

aUp  to  April  1,  1913,  flat  price  paid  for  milk  of  any  test. 

April  1,  1913,  to  October  1,  1915,  2  cents  per  point  paid  for  milk  testing  above  3.7 
percent;  for  milk  testing  below  3.6  percent,  2  cents  per  point  deducted. 

October  1,  1915,  to  April  1,  1916,  difference  of  3  cents  per  point  up  or  down  made  on 
3.6-percent  base. 

April  1,  1916,  to  July  1,  1918,  difference  of  3  cents  per  point  up  or  down  made  on  3.5- 
percent  base. 

July  1,  1918,  to  December  31,  1924,  difference  of  4  cents  per  point  up  or  down 
made  on  3.5-percent  base. 

From  January,  1919,  to  October,  1921,  the  dealers  paid  the  Milk  Producers  Cooper- 
ative Marketing  Company  agreed  prices.  After  deducting  the  administrative  expenses 
and  loss  on  surplus,  the  Marketing  Company  paid  the  following  prices  to  producers: 


Year 

Jan. 

Feb. 

Mch. 

Apr. 

May 

June 

July 

Aug. 

Sept. 

Oct. 

Nov. 

Dec. 

Aver. 

1919... 
1920  
1921  

$3.72 
3.56 
2.25 

$3.46 
3.28 
2.11 

$2.97 
2.75 
2.11 

$2.77 
2.61 
2.11 

$2.42 
2.62 
1.02 

$2.42 
2.67 
1.84 

$2.97 
3.10 
1.84 

$3.48 
3.51 
2.07 

$3.51 
3.33 
1.35 

$3.59 
3.33 
1.57 

$3.56 
2.74 
(b) 

$3.61 
2.34 
(b) 

$3.21 
2.99 

bMilk  checks  for  November  and  December,  1921,  were  held  up.   The  Company  dis- 
continued business,  and  when  reorganized  gave  bonds  to  cover  these  two  months. 

TABLE  B. — RETAIL  PRICES  OF  MILK  AND  CREAM  ON  DELIVERY  ROUTES  IN  CHICAGO 


Date  prices  became  effective 

Quarts 
of  milk 

Pints 
of  milk 

Half-pints 
of  22-percent 
cream 

Half-pints 
of  32-percent 
cream 

Quarts  of 
butter- 
milk 

January  1,  1902... 

cents 
7 

cents 
4 

cents 
9 

cents 

cents 

November  1,  1907  

8 

4 

9 

February  1,  1908  

7 

4 

9 

November  1,  1909  

8 

5 

10 

12 

5 

August  1,  1916  , 

9 

5 

10 

12 

5 

April  3,  1917  

10 

6 

12 

14 

7 

October  1,  1917  

13 

7 

15 

18 

9 

November  1,  1917  

12 

7 

is 

18 

9 

August  1,  1918  

12.5 

7 

15 

18 

9 

September  1,  1918  

13 

8 

is 

18 

9 

November  1,  1918... 

14 

8 

15 

18 

10 

March  1,  1919  

13 

8 

15 

18 

10 

May  20,  1919  

14 

8 

15 

18 

10 

August  1,  1919  

15 

9 

16 

20 

10 

March  1,  1920  

14 

9 

16 

20 

10 

July  1,  1920  

IS 

9 

17 

22 

10 

August  5,  1920  

16 

10 

17 

22 

10 

November  1,  1920  

15 

9 

17 

22 

10 

December  1,  1920... 

14 

9 

17 

22 

10 

February  1,  1921..., 

14 

8 

17 

22 

10 

September  1,  1921  

12 

7 

16 

21 

10 

December  1,  1922  

12 

8 

16 

21 

10 

January  8,  1923  

13 

8 

16 

21 

10 

Julv  1,1923  

14 

8 

1925] 


MARKETING  MILK  IN  CHICAGO  DAIRY  DISTRICT 


537 


TABLE  C. — INDEX  NUMBERS  OF  PRICES  PAID  BY  DEALERS  FOR  3.5-PERCENT  MILK  AT 
COUNTRY   PLANTS   IN  THE    CHICAGO   DAIRY   DISTRICT 
Five-year  average  of  each  month  (1909  to  1913)  =  100 


Year 

Jan. 

Feb. 

Mch. 

Apr. 

May 

June 

July 

Aug. 

Sept. 

Oct. 

Nov. 

Dec. 

1907... 

94 

88 

87 

81 

86 

90 

93 

91 

88 

1908... 

93 

95 

97 

97 

92 

92 

85 

90 

93 

87 

86 

83 

1909  

87 

90 

91 

101 

96 

92 

85 

90 

93 

93 

94 

94 

1910  

98 

98 

97 

104 

105 

102 

97 

94 

97 

102 

105 

107 

1911  

112 

110 

107 

94 

96 

97 

105 

104 

100 

102 

102 

102 

1912  

104 

104 

10* 

94 

92 

97 

105 

104 

103 

96 

97 

96 

1913  

98 

98 

101 

108 

110 

112 

109 

108 

107 

105 

102 

102 

1914  

107 

101 

104 

108 

110 

107 

109 

112 

107 

108 

105 

102 

1915  

104 

101 

104 

104 

105 

107 

105 

112 

107 

108 

105 

102 

1916... 

104 

101 

104 

119 

127 

121 

125 

122 

117 

114 

116 

112 

1917  

115 

116 

116 

173 

175 

155 

171 

165 

159 

206 

178 

172 

1918  

181 

177 

182 

191 

180 

175 

185 

198 

201 

200 

203 

202 

1919... 

211 

202 

189 

201 

219 

243 

242 

253 

245 

219 

199 

195 

1920  , 

202 

J94 

182 

198 

237 

267 

258 

266 

255 

223 

169 

139 

1921  

140 

136 

148 

169 

180 

199 

185 

165 

103 

105 

99 

96 

1922.... 

101 

98 

107 

122 

149 

155 

161 

147 

138 

123 

113 

112 

1923  

140 

145 

151 

173 

202 

218 

222 

198 

190 

166 

1S2 

147 

1924  

150 

155 

168 

180 

202 

223 

202 

179 

174 

145 

133 

128 

TABLE  D. — INDEX  NUMBERS  OF  THE  DEALERS'  MARGIN  BETWEEN  RETAIL  PRICE  PER 
QUART  OF  MILK  AND  PRICE  PAID  TO  PRODUCERS  AT  COUNTRY  PLANTS  IN  THE 

CHICA&O  DAIRY  DISTRICT 
Five-year  average  of  each  month  (1909  to  1913)  =  100 


Year 

Jan. 

Feb. 

Mch. 

Apr. 

May 

June 

July 

Aug. 

Sept. 

Oct. 

Nov. 

Dec. 

1903... 

96 

94 

95 

92 

92 

94 

96 

97 

95 

98 

93 

91 

1904... 

91 

92 

93 

92 

94 

96 

98 

97 

95 

100 

98 

93 

1905  

94 

99 

97 

92 

94 

96 

98 

97 

95 

100 

98 

96 

1906  

96 

99 

97 

92 

94 

% 

98 

97 

95 

98 

93 

91 

1907  

91 

94 

95 

88 

90 

90 

94 

92 

91 

86 

108 

111 

1908  

112 

84 

83 

86 

88 

88 

92 

90 

88 

91 

88 

91 

1909  

91 

89 

88 

84 

86 

88 

92 

90 

88 

86 

105 

106 

1910  

107 

106 

106 

100 

102 

103 

105 

109 

108 

103 

96 

93 

1911  

94 

97 

100 

109 

105 

105 

102 

101 

103 

103 

98 

98 

1912... 

102 

101 

102 

109 

107 

105 

102 

101 

101 

108 

103 

104 

1913  

107 

106 

104 

98 

100 

99 

100 

99 

99 

100 

98 

98 

1914  

99 

104 

102 

98 

100 

101 

100 

97 

99 

98 

96 

98 

1915  

102 

104 

102 

100 

102 

101 

102 

97 

99 

98 

96 

98 

1916  

102 

104 

102 

92 

90 

96 

90 

111 

114 

117 

108 

111 

1917  

114 

116 

116 

100 

107 

117 

105 

105 

108 

134 

123 

126 

1918  

127 

131 

132 

130 

141 

146 

137 

137 

144 

139 

147 

146 

1919  

147 

158 

150 

144 

143 

155 

146 

153 

157 

170 

176 

179 

1920  

183 

191 

178 

167 

152 

144 

156 

168 

172 

191 

206 

210 

1921  

218 

220 

206 

186 

179 

171 

176 

189 

188 

196 

199 

205 

1922  

206 

205 

192 

174 

156 

153 

150 

158 

166 

179 

184 

187 

1923... 

193 

188 

181 

163 

150 

146 

156 

168 

172 

191 

196 

202 

1924  

208 

203 

190 

180 

171 

164 

168 

176 

181 

211 

216 

224 

TABLE  E. — NUMBER  OF  BOTTLES  HANDLED  MONTHLY  BY  MILK  DEALERS'  BOTTLE 
EXCHANGE  DURING  THE  THREE  YEARS  1920,  1921,  1922 


19 

20 

19 

21 

19 

22 

Month 

Received  at 
Exchange 

Delivered  to 
dealer* 

Received  at 
Exchange 

Delivered  to 
dealers 

Received  at 
Exchange 

Delivered  to 
dealer* 

15  134 

396 

906  340 

731  107 

1  394  358 

1  387  375 

701  998 

746  070 

1  067  370 

1  125  705 

1  332  765 

1  063  113 

March  

983  313 

964  789 

081  475 

1  050  813 

1  636  239 

1  662  729 

April  

972  768 

993  933 

264  913 

320  524 

1  579  322 

1  548  322 

May  

1  034  200 

1  054  614 

254  921 

266  921 

2  741  640 

2  372  003 

1  075  679 

1  037  799 

481  560 

411  453 

2  748  440 

2  875  033 

July... 

1  157  637 

1  190  060 

469  342 

416  471 

3  187  055 

3  296  762 

August  

1  236  974 

1  369  230 

717  854 

736  563 

3  149  822 

3  213  619 

1  203  474 

1  316  010 

604  333 

729  599 

2  812  106 

2  752  069 

October  

1  138  327 

1  212  207 

501  797 

521  357 

2  933  309 

3  017  567 

799  222 

822  247 

472  580 

499  641 

2  508  658 

2  685  025 

December  

821  354 

887  596 

1  376  223 

424  110 

2  107  479 

2  247  538 

Total  

11  140  080 

11  594  951 

16  198  708 

16  234  264 

28  131  193 

28  121  155 

538 


BULLETIN  No.  269 


[June, 


TABLE  F. — RELATIVE   CONSUMPTION   OF   PINTS  AND  QUARTS   OF  MILK   IN   DIFFERENT 

PARTS  OF  CHICAGO,  BY  MONTHS 
Based  on  average  retail  sales  during  the  three-year  period  1920  to  1922 


Month 

Pints  of  milk  consumed  for  each  100  quarts 

Section  A 

Section  B 

Section  C 

Section  D 

Section  E 

Oak  Park 

Evanston 

All  Chicago 
and 
suburbs 

January.  .  .  . 
February.  .  . 
March  

15.4 
15.2 
14.6 
15.3 
16.6 
17.9 
18.6 
18.9 
17.7 
17.1 
16.6 
13.9 

22.1 

22.2 
21.8 
22.9 
24.7 
26.7 
27.6 
27.7 
26.2 
25.3 
24.4 
20.9 

20.9 
21.2 
20.9 
21.8 
23.0 
25.6 
26.4 
27.4 
25.9 
24.9 
24.3 
19.7 

33.5 
34.3 
34.9 
36.3 
39.1 
42.6 
46.4 
48.1 
44.1 
41.0 
39.1 
32.8 

22.1 
22.1 
15.2 
25.7 
23.7 
25.3 
26.5 
26.8 
18.6 
18.1 
23.9 
20.4 

17.7 
17.8 
17.1 
17.8 
18.8 
20.5 
21.6 
21.9 
20.1 
19.5 
19.0 
16.0 

13.9 
14.0 
14.3 
14.9 
15.6 
17.1 
18.5 
19.0 
17.6 
16.9 
16.2 
13.7 

25.1 
25.7 
26.0 
27.0 
28.8 
31.8 
32.8 
33.7 
31.2 
29.9 
29.0 
24.1 

July  

August.  .  . 
September 
October  .  . 
November 
December 

Total  

16.5 

24.3 

23.5 

39.2 

23.7 

18.9 

15.9 

28.9 

TABLE   G. — AVERAGE   PRICE   PAID   TO   PRODUCERS   BY   Six   CONDENSERIES 

THE  CHICAGO  DAIRY  DISTRICT* 
Per  100  pounds  of  3.5-percent  milk 


LOCATED 


Month 

1913 

1914 

1915 

1916 

1917 

1918 

1919 

1920 

1921 

1922 

10-yr. 
aver. 

January  

£1.79 

£1.88 

31.84 

31.80 

32  10 

33.24 

33.76 

33.60 

32.11 

31.57 

32.37 

70 

77 

1  76 

1  71 

2  09 

3  10 

3  47 

3  35 

2  09 

1  45 

2  25 

March  

61 

67 

67 

1  62 

2  00 

2  91 

3  02 

2  86 

2  06 

1.45 

2.09 

April  

.53 

.47 

.47 

1.64 

2  40 

2  62 

2  80 

2.75 

2.08 

1.44 

2.02 

30 

22 

22 

1  47 

2  06 

2  06 

2  50 

2  70 

90 

44 

1  79 

16 

10 

10 

1  28 

1  71 

1  82 

2  53 

2  75 

64 

.44 

1  65 

July... 

.38 

36 

32 

1  54 

2  17 

2  30 

3  00 

3.20 

.65 

.67 

1.% 

August  

.50 

.50 

49 

1  69 

2  33 

2  75 

3  52 

3.49 

.84 

.79 

2.19 

56 

51 

si 

1  72 

2  39 

2  92 

3  55 

3  44 

78 

81 

2  22 

October  
November  

.68 
1.79 

.76 
.84 

.68 
1.78 

1.94 
2  08 

3.41 
3  24 

3.32 
3  68 

3.63 
3  60 

2.66 
2  28 

.78 
1.80 

.89 
2.06 

2.38 
2.42 

1  88 

86 

1  80 

2  13 

3  24 

3  77 

3  65 

2  19 

1  76 

2  31 

2  46 

Average  

31.57 

31.58 

31.55 

SI.  72 

32.43 

32.87 

33.25 

32.94 

31.87 

31.69 

32.15 

aElgin  and  Belvidere,  Illinois;  Burlington,  Monroe,  New  Glarus,  and  Sharon,  Wis- 
consin. 


TABLE  H. — AVERAGE  PRICE  PAID  TO  PRODUCERS  BY  NINE  CONDENSERIES  LOCATED  IN 

THE  TERRITORY  CONTIGUOUS  TO  THE  CHICAGO  DAIRY  DISTRICT" 

Per  100  pounds  of  3.5-percent  milk 


Month 

1913 

1914 

1915 

1916 

1917 

1918 

1919 

1920 

1921 

1922 

10-yr. 
aver. 

January  

31.74 
1.72 
1.69 
1.58 
.38 
.26 
.43 
.52 
.56 
.64 
.72 
1.80 

31.82 
1.76 
1.68 
1.50 
.29 
.22 
.39 
.48 
.52 
.71 
.73 
.73 

31.72 
1.66 
1.59 
1.41 
1.25 
1.17 
1.29 
1.40 
1.42 
1.54 
1.61 
1.68 

31.73 
.70 
.64 
.63 
.47 
.35 
.49 
.62 
.67 
1.86 
2.07 
2.28 

32.21 
2.13 
2.03 
2.33 
2.17 
2.00 
2.28 
2.36 
2.43 
3.07 
3.10 
3.20 

33.22 
3.15 
2.91 
2.57 
2.13 
1.91 
2.24 
2.66 
2.92 
3.36 
3.69 
3.79 

33.78 
3.34 
2.94 
2.84 
2.70 
2.71 
3.03 
3.49 
3.57 
3.60 
3.59 
3.64 

33.62 
3.29 
2.90 
2.81 
2.78 
2.80 
3.16 
3.24 
3.22 
2.34 
2.20 
1.70 

31.84 
1.88 
2.03 
2.04 
.73 
.36 
.38 
.71 
.71 
.72 
.77 
1.70 

31.60 
1.46 
1.45 
1.46 

1.45 
1.45 
1.60 
1.62 
1.72 
1.87 
2.08 
2.33 

32.33 
2.21 
2.09 
2.02 
1.84 
1.72 
1.93 
2.11 
2.17 
2.27 
2.36 
2.38 

February  

March  

April  

July... 

August  

October  

November  
December  

Average  

31.59 

31.57 

31.48 

31.71 

32.44 

32.88 

33.27 

32.84 

31.74 

31.67 

32.12 

*Dixon,  Orangeville,  Sterling,  and  Union,  Illinois;  Berlin,  Chilton,  Johnson  Creek, 
Richland  Center,  and  Watertown,  Wisconsin. 

19251 


MARKETING  MILK  IN  CHICAGO  DAIRY  DISTRICT 


539 


TABLE    I. — AVERAGE    PRICE    PAID    TO    PRODUCERS    BY    THREE    FOREIGN-TYPE    CHEESE 

FACTORIES  IN  THE  CHICAGO  TERRITORY" 

Per  100  pounds  of  3.5-percent  milk 


Year 

Jan. 

Feb. 

Mch. 

Apr. 

May 

June 

July 

Aug. 

Sept. 

Oct. 

Nov. 

Dec. 

Aver." 

1910... 

(b) 

$1.06 

31.18 

31.32 

31.29 

31.18 

31.06 

31.13 

31.18 

31.03 

31.16 

1911... 

.68 

.66 

.92 

.91 

.89 

1.07 

1.18 

.38 

.96 

1912  

1.20 

1.28 

1.30 

1.05 

.26 

1.45 

1.64 

53 

1.70 

1.38 

1913  

1.23 

1.32 

1.17 

1.16 

.20 

1.20 

1.34 

.51 

1.65 

1.31 

1914... 

.82 

.00 

1.00 

1.34 

.00 

1.07 

1.23 

.30 

1.30 

1.12 

1915  

1  03 

19 

1.02 

.95 

.11 

1  29 

1  54 

.61 

1.52 

1.25 

1916  

1.25 

.30 

1.34 

1.42 

.92 

2.20 

2.09 

2.23 

1.98 

1.75 

1917.... 

1.81 

.74 

1.77 

1.83 

2.21 

2.59 

2.49 

2.67 

2.65 

2.20 

1918. 
1919. 
1920 

32.36 
2.26 
2  50 

552.35 
1.74 
2  22 

31.65 
2.01 
2  18 

1.69 
2.31 
2  16 

.97 
2.57 
2  49 

2.21 
2.74 
2  28 

2.65 
2.92 
2  01 

2.72 
2.65 
2  21 

3.21 
2.96 
2  39 

3.03 
3.08 
1  96 

3.20 
3.19 
1  99 

2.90 
2.83 
1  70 

2.50 
2.61 
2.17 

1921. 
1922. 
1923. 

1.44 
1.26 

1.82 

1.54 
1.16 
1.74 

1.70 
1.04 
1.53 

1.13 
1.17 
1.44 

1.64 
1.46 
1.98 

1.67 
1.35 
1.68 

1.33 
1.48 

1.42 
1.62 

1.63 
2.09 

1.98 
1.97 

1.57 
2.10 

1.75 
2.21 

1.57 
1.58 

"Located  in  Dane,  Green,  and  LaFayette  counties,  Wisconsin. 

""Foreign  cheese  is  ordinarily  not  manufactured  during  the  winter  months. 

"Average  prices  are  for  the  number  of  months  given  in  the  table. 


TABLE  J. — AVERAGE  PRICE  PAID  TO  PRODUCERS  BY  THREE  AMERICAN  CHEESE  FACTORIES 

IN  THE  CHICAGO  TERRITORY* 
Per  100  pounds  of  3.5-percent  milk 


Year 

Jan. 

Feb. 

Mch. 

Apr. 

May 

June 

July 

Aug. 

Sept. 

Oct. 

Nov. 

Dec. 

Aver. 

1916. 
1917. 

31.63 
2  12 

31.56 
2  08 

31.37 
2  01 

31.26 
1  92 

31.21 
1  93 

31.20 
1  95 

31.16 
1  81 

31.35 
1  92 

31.72 
2  26 

31.96 
2  26 

32.55 
2  31 

32.24 
2  41 

31.60 
2.08 

1918. 

2.39 

2  28 

1  81 

1.62 

1.66 

1.78 

1.88 

2  06 

2.73 

3.22 

3.52 

3.44 

2.37 

1919 

3  02 

2  12 

2  51 

2  35 

2  54 

2  49 

2  57 

2  51 

2  50 

2  89 

2  89 

3  07 

2  62 

1920. 
1921. 
1922. 
1923  

2.86 
2.17 
1.63 
2.25 

2.42 
2.17 
1.56 
1.91 

2.41 
1.74 
1.40 
1.71 

2.28 
1.10 
1.08 
1.53 

2.18 
.93 
1.29 
1.74 

1.86 
.94 
1.36 
1.68 

1.84 
1.40 
1.36 

1.99 
1.44 
1.45 

2.25 
1.52 
1.79 

2.12 
1.76 
2.25 

2.37 
1.68 
2.38 

2.03 
1.77 
2.42 

2.22 
1.55 
1.66 

"Located  in  Iowa  and  Sheboygan  counties,  Wisconsin. 


TABLE  K. — VALUE  OF  100  POUNDS  OF  3.5-PERCENT  MILK  ON  A  BUTTERFAT  AND  SKIM 

MILK  BASIS" 


Year 

Jan. 

Feb. 

Mch. 

Apr. 

May 

June 

July 

Aug. 

Sept. 

Oct. 

Nov. 

Dec. 

Aver. 

1907. 

31.21 

31.27 

31.23 

31.18 

3  .96 

3  .94 

3  .99 

3  .98 

31.07 

31.11 

3  .98 

31.06 

31.08 

1908. 

1.22 

.36 

1.19 

.16 

.98 

.96 

.93 

.93 

.97 

1.09 

.17 

1.22 

1.10 

1909. 

1.23 

.22 

1.17 

.10 

1.01 

1.02 

1.05 

1.10 

1.22 

1.24 

.27 

1.34 

1.16 

1910. 

1.39 

.19 

1.26 

.24 

1.14 

1.12 

1.11 

.21 

1.24 

.22 

.28 

1.25 

1.22 

1911. 

1.19 

.11 

1.10 

.96 

.96 

.97 

1.01 

.12 

1.13 

.23 

.34 

1.45 

1.13 

1912. 

1.49 

.29 

1.24 

.30 

1.24 

1.13 

1.13 

.12 

1.20 

.27 

.37 

1.44 

1.27 

1913. 

1.37 

.41 

1.42 

.35 

1.18 

1.16 

1.14 

.18 

1.31 

.30 

.33 

1.39 

1.30 

1914. 

1.36 

.19 

1.17 

.11 

1.11 

1.13 

1.14 

.25 

1.27 

.28 

.37 

1.37 

1.23 

1915. 

1.34 

.29 

1.18 

.24 

1.18 

1.18 

1.12 

.08 

1.10 

.19 

1.26 

1.41 

1.21 

1916. 

1.36 

.38 

1.50 

.53 

1.32 

1.29 

1.25 

.32 

i:43 

.51 

1.6? 

1.69 

1.43 

1917. 

1.67 

.75 

1.78 

.87 

1.74 

1.76 

1.80 

.90 

2.08 

2.11 

2.11 

2.26 

1.90 

1918. 

2.30 

.31 

2.09 

.99 

1.99 

2.00 

2.07 

.13 

2.49 

2.64 

2.78 

3.01 

2.32 

1919. 

2.77 

.19 

2.60 

.75 

2.61 

2.37 

2.35 

.45 

2.60 

2.92 

3.10 

3.15 

2.66 

1920. 

2.77 

.81 

3.01 

.98 

2.71 

2.57 

2.56 

.53 

2.66 

2.53 

2.51 

2.09 

2.64 

1921. 

2.07 

.90 

1.95 

.85 

1.26 

1.25 

1.58 

.63 

1.64 

1.82 

1.78 

1.73 

1.71 

1922. 

1.44 

.53 

1.65 

.56 

1.47 

1.51 

1.54 

.47 

1.60 

1.78 

2.05 

2.24 

1.65 

1923. 

2.13 

.08 

2.07 

1.98 

1.74 

1.59 

1.54 

.76 

1.88 

1.98 

2.15 

2.26 

1.93 

1924. 

2.19 

2.06 

1.93 

1.59 

1.49 

1.56 

"Butterfat  prices  are  for  sour  cream  delivered  to  a  centralizer  creamery  in  Chicago 
and  skim  milk  is  based  on  the  wholesale  price  of  tankage  (10  pounds  of  skim  milk  =  1 
pound  of  tankage). 


540 


BULLETIN  No.  269 


[Junf, 


TABLE  L. — INDEX  NUMBERS  OF  PRICES  PAID  FOR  BUTTERFAT  BY  A  CHICAGO  CENTRALIZER 

CREAMERY* 
Five-year  average  of  each  month  (1909-1913  =  100) 


Year 

Jan. 

Feb. 

Mch. 

Apr. 

May 

June 

July 

Aug. 

Sept. 

Oct. 

Nov. 

Dec. 

1907... 

91 

104 

101 

101 

86 

87 

91 

84 

88 

89 

73 

76 

1908  

91 

112 

97 

98 

88 

89 

85 

80 

78 

87 

89 

89 

1909  

93 

99 

96 

93 

92 

95 

98 

97 

102 

101 

98 

99 

1910  

107 

96 

103 

106 

104 

106 

104 

108 

103 

97 

97 

90 

1911  

86 

87 

86 

77 

83 

87 

91 

97 

91 

97 

101 

106 

1912  

112 

104 

99 

109 

113 

105 

103 

97 

97 

101 

104 

105 

1013  

102 

114 

116 

115 

107 

108 

104 

102 

107 

104 

100 

101 

1914... 

101 

94 

93 

91 

IOC 

104 

105 

108 

102 

100 

102 

98 

1915  

97 

101 

94 

103 

106 

110 

102 

92 

88 

94 

94 

102 

1916  

101 

111 

124 

132 

122 

122 

116 

115 

117 

121 

123 

121 

1917  

123 

139 

140 

154 

151 

159 

159 

157 

162 

160 

151 

155 

1918  

161 

176 

157 

153 

168 

174 

180 

175 

195 

202 

204 

213 

1919  

199 

162 

201 

225 

231 

211 

207 

204 

205 

229 

231 

225 

1920  

198 

216 

235 

242 

237 

227 

224 

208 

208 

193 

186 

148 

1921  

152 

155 

160 

158 

111 

116 

150 

146 

136 

149 

137 

126 

1922  

102 

118 

123 

126 

131 

140 

137 

121 

125 

138 

154 

163 

1923  

157 

163 

166 

166 

158 

149 

144 

145 

154 

158 

165 

168 

1924  

169 

171 

160 

135 

140 

151 

'Sour  cream  delivered  at  the  plant. 


UNIVERSITY  OF  ILLINOIS-URBANA 


